Chapter 8

Ethical Dilemmas in AI-Driven Advertising

Serim Paker1

Abstract
Artificial intelligence (AI) has transformed the advertising sector, improving
efficiency, personalizing, and consumer involvement. Big data analytics,
programmatic advertising, and automated decision-making combined in AI-
driven advertising create tailored marketing campaigns with hitherto unheard-
of accuracy. But these advances raise moral issues that create issues about
consumer manipulation, privacy, prejudice, and openness. The capability
of artificial intelligence to employ consumer information to allow hyper-
personalization raises issues about consumer autonomy and data protection
laws. Also, algorithmic bias within AI-powered advertising has the potential
to reinforce social injustices, thus encouraging discriminative measures.
Deepfakes, chatbots, and voice assistants used during advertising are also
crossing moral limits because deceptive measures are employed to manipulate
consumer behavior without open consent. Emphasizing the need to ensure
strong regulations and corporate responsibility, this chapter critiques the moral
issues raised about artificial intelligence-powered advertising. Some of the
core issues like data privacy, fairness within algorithms, and disinformation are
discussed along with some probable solutions like moral AI design principles,
openness regulations, and measures to ensure regulatory compliance. At the
end, the chapter supports a rational strategy that capitalizes on the capability
of artificial intelligence but follows moral principles to encourage customer
trust and eco-friendly advertising measures.

1. Introduction
AI has changed advertising, allowing for hyper-personalization, real-
time targeting, and automated decision-making. While these innovations
improve efficiency and consumer interaction, they raise ethical problems.
Issues such as data privacy, bias, and consumer manipulation need a thorough

1 Asst.Prof Dr., Dokuz Eylül University, Izmir Türkiye, serim.paker@deu.edu.tr,

https://orcid.org/0000-0002-8931-9039

https://doi.org/10.58830/ozgur.pub710.c3025
117
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evaluation of AI’s involvement in advertising. This chapter investigates these

ethical quandaries, provides real-world examples of AI misuse, and proposes
a paradigm for responsible AI-driven advertising.

2. The Role of AI in Advertising

Artificial intelligence (AI) has transformed the advertising industry
by providing hyper-personalized marketing strategies and real-time data
analysis. AI-powered systems can process massive volumes of consumer
activity data, enabling firms to develop customized adverts that match
individual interests and browsing behaviors. Automation in ad placement
and campaign optimization has improved efficiency, lowering costs while
increasing engagement. AI also improves creative processes by creating
dynamic content, forecasting trends, and tailoring communications to specific
audiences. While AI provides unprecedented opportunity for advertisers, it
also raises ethical questions about privacy, bias, and the manipulation of
customer preferences.

2.1. AI-driven Targeting and Personalization

Artificial Intelligence (AI) is substantially transforming various
sectors, particularly e-commerce and healthcare, through its ability to
deliver targeted and personalized experiences based on vast datasets. In
the e-commerce industry, AI-powered personalization techniques employ
complex algorithms to scan consumer behavior and preferences to present
highly personalized product recommendations and content. This has the
advantage of enhancing customer satisfaction, engagement, and loyalty,
ultimately establishing market trends within the industry (Raji et al., 2024)
emphasize that AI’s ability to generate personalized consumer experiences
not only enhances sales but also brand loyalty through effectively meeting
the individual customer needs.
AI application in healthcare extends the use of conventional diagnostics
and therapy strategies to include personalized medicine and patient care.
AI algorithms analyze genetic and demographic data to ascertain patients
best positioned to benefit from specific interventions, optimizing the
interventions’ efficacy(Pawar et al., 2023; Weerarathna et al., 2023).
Weerarathna et al. (2023) , for instance, refer to the use of AI models to
predict patient responses to chemotherapy to allow personalized treatment
strategies. Furthermore, Kokudeva et al. (2024) also investigate the
use of AI to help determine targets and optimize the treatment protocol
using machine learning, showing AI’s capability to generate personalized
therapeutic strategies.
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Despite the amazing advantages brought about through AI in targeting

and personalization, there are issues that remain, particularly in the shape of
ethics issues and data privacy. As AI marketing continues to evolve further,
the equilibrium between applying consumer information to create profits
and consumer trust hangs in the balance. Gupta et al. (2021) are concerned
about the ethics of AI marketing, citing the necessity for responsibility and
openness from businesses applying AI tools. This attitude supports the need
of ethical frameworks as artificial intelligence is more ingrained in many
fields, not only business and marketing but also including tailored healthcare
plans and drug development.
In addition, the integration of AI technologies has far-reaching
implications for healthcare providers. AI’s ability to provide real-time analysis
using wearable devices and point-of-care tests provides healthcare providers
the ability to deliver better patient outcomes along with system efficiency
improvements (Yammouri & Lahcen, 2024). Such innovation is moving
toward the future where real-time analysis means timely interventions
further individualizing healthcare delivery. However, the technologies also
raise the need to ensure robust data handling practices to safeguard patient
privacy while making the best use of the data (Wasilewski et al., 2024).
In summary, overall, the application of AI to targeting and personalization
is revolutionizing industries through higher customer involvement and
patient care optimization. But the intersection of technology, ethics, and
consumer privacy has to be balanced carefully to ensure that the full benefit
of AI can be achieved while safeguarding consumer interests.

2.2. Advertising with Big Data Analytics

Particularly under the cover of programmatic advertising and big
data analysis, the junction of artificial intelligence (AI) and targeting and
personalizing has been much studied. Programmatic advertising depends
on artificial intelligence algorithms and vast amounts of data to provide
customized advertising that will help to make marketing effective and
unique. AI-powered platforms scan consumer behavior, preferences, and
demographic data to automate the buying and placement of the advertising
in real-time to generate highly targeted marketing strategies that enhance
the user experience and conversion rate. According to Holloway (2024), the
use of AI and big data analysis under marketing campaigns has the potential
to significantly enhance customer satisfaction through personalized offers
that appeal to individual customers to generate lasting loyalty.
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Big data analytics plays a critical role in the effectiveness of programmatic

advertising. Data-driven insights allow marketers to craft compelling
campaigns that are precisely targeted based on consumer behavior analysis.
The utilization of personal data gathered from various sources, including
Internet of Things (IoT) devices, social media platforms, and online
transactions, enables marketers to deliver advertisements tailored to the
needs and preferences of their audience (Khrais, 2020; Oh et al., 2019). By
effectively combining AI’s capabilities with extensive data sources, marketers
can maximize their outreach and engagement while minimizing advertising
wastage.
But the widespread use of personal information raises privacy-related
ethics issues and challenges. As Oh et al. (2019) further clarify, brokers
accumulate large amounts of personal information, balancing the need to
provide personalized marketing with the need to protect consumer privacy.
Overcoming these challenges involves establishing an open framework that
governs the collection and use of personal information to protect consumer
trust and ensure regulatory compliance. The new landscape demands that
businesses employ robust data handling practices to ensure the ethical use
of AI and consumer information through programmatic advertising. Ethical
issues must be top priority, as evidenced through various research pieces
regarding the balance between privacy and personalization (Park et al.,
2023).
Moreover, AI-driven personalization extends beyond mere advertisement
targeting to impact consumer behavior on a broader scale. Studies suggest
that personalized promotions, such as mobile coupons, can enhance
customer engagement and influence purchasing decisions positively (An et
al., 2021; Huang et al., 2023). As Oh et al. Oh et al. (2019) elaborate,
data brokers collect vast amounts of personal information, creating a tension
between the demand for personalized marketing and the necessity to
protect consumer privacy. Addressing these concerns involves establishing
a transparent framework that governs the collection and usage of personal
data to maintain consumer trust and compliance with regulatory standards.
The evolving landscape necessitates that businesses employ robust data
management practices, ensuring ethical use of AI and consumer data in
programmatic advertising. Ethical considerations must be at the forefront,
as underscored by various studies on the balance between personalization
and privacy (Park et al., 2023).
In addition to this, AI-powered personalization breaks the limits of
mere advertising targeting to influence consumer behavior on a greater
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scale. Studies prove that personalized offers such as mobile coupons can
promote higher customer engagement and influence purchasing behavior
positively(An et al., 2021; Huang et al., 2023). The competitive advantage
gained by tailoring marketing messages based on consumer profiles aligns
marketing strategies with individual consumer preferences, ultimately driving
higher conversion rates and more effective brand interactions (Bhuiyan,
2024; Sodiya et al., 2024).
To summarize, the confluence of artificial intelligence-driven
personalization and programmatic advertising with big data analytics gives
enormous opportunity for marketers to effectively improve their campaigns.
Enterprises have the ability to utilize these technologies in order to provide
individualized experiences while simultaneously navigating the essential
problems of ethical data usage and privacy protection. This will provide a
sustainable and responsible approach to marketing in the digital era.

2.3. AI-Enhanced Targeting and Personalization, Programmatic

Advertising, AI-Generated Content, Chatbots, and Voice
Assistants
Particularly in the areas of personalizing through targeting, programmatic
advertising, AI-generated content, chatbots, and voice assistants, the
integration of artificial intelligence (AI) technologies has revolutionized many
industries. AI combined with big data analytics offers effective marketing
solutions and improves user interactions on several digital platforms.

2.3.1. AI-driven Targeting and Personalization with Programmatic

Advertising
AI-driven targeting has reshaped marketing strategies, particularly
programmatic advertising, which uses AI algorithms to automate ad buying
and placement in real time. This method enables businesses to analyze
consumer data and behaviors, resulting in targeted advertisements that
boost user engagement and conversion rates. Big data analytics improves
these capabilities by facilitating the extraction of relevant consumer insights,
allowing marketers to tailor their strategies more effectively based on
identified preferences and purchasing patterns. However, this reliance on
personal data requires strong ethical considerations, particularly concerning
privacy, data security, and consumer trust (Kokudeva et al., 2024; Pawar et
al., 2023; Weerarathna et al., 2023).
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2.3.2. AI Content Generation and Its Consequences

AI-generated content (AIGC) has gained extensive interest based on the
prospect of automating the production of content using various forms like
text, imagery, and video. Research indicates that the quality of AI-generated
content has a direct connection to the extent to which it will be used and
accepted, especially in the learning sector where it has proven to be linked
to greater learning tool satisfaction amongst learners (Holloway, 2024;
Khrais, 2020). Research indicates that AI has the capability to produce
new and personalized content that responds to certain user requests, further
cementing the use of AI in personalized marketing strategies. The perception
of AI-generated content is however complex; users are highly cautious about
AI-generated content that has proven to be lower compared to human-
generated content (Altay & Gilardi, 2024; Zhang & Gosline, 2023). This
makes users avoid using AI tools to generate content despite the fact that AI
tools are highly efficient. (Altay & Gilardi, 2024; Zhang & Gosline, 2023).
Detecting AI-generated content poses additional challenges, particularly
in academic and professional writing contexts where integrity is paramount.
Current studies demonstrate that while AI content detectors can identify
machine-generated text with reasonable accuracy, they frequently misclassify
human-generated contenas AI, raising concerns about their reliability in
educational assessments and publishing (Elkhatat et al., 2023; Yadav &
Rathore, 2023). This misclassification highlights the need for more nuanced
detection tools capable of differentiating between human and AI-generated
texts, especially in contexts involving mixed authorship (Howard (Howard
et al., 2024).

2.3.3. Voice Assistants and Chatbots in Consumer Interactions

Chatbots and voice assistants are core components of AI-powered
personalization. Chatbots communicate with users through textual
conversations, often within the context of a service-related scenario, whereas
voice assistants employ voice recognition mechanisms to create a more
naturalistic user experience(Khedekar et al., 2023; Sezgin et al., 2020). These
two tools have been used within various industries, including education
and healthcare, where they facilitate efficient communication and automate
operations (Terzopoulos & Satratzemi, 2020). Research has shown that
adults and children alike are attracted to the ease of use of the AI tools,
which are capable of performing functions from answering questions to
managing routine operations (Terzopoulos & Satratzemi, 2020; Khedekar
et al., 2023). The increased usage of the tools signifies a shift toward more
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interactive and reactive digital experiences that are personalized to the

individual needs of users.
In summary, overall, the convergence of programmatic advertising,
AI-powered personalization, voice assistants, AIGC, and chatbots has the
transformative capability to benefit both users and businesses. That being
said, there are certain issues surrounding ethics, social attitudes, and content
identification that need to be addressed as these technologies mature
further. Navigating through the complexities will be essential to unlock
the full benefits that AI has to offer to deliver higher user satisfaction and
engagement.

2.4. AI in Campaign Management and Budget Optimization

Artificial intelligence (AI) is being increasingly implemented in
marketing, which is causing a number of aspects of campaign management
and budget optimization to undergo ongoing transformations. A significant
contribution to the improvement of operational efficiency, personalization,
and the overall impact of marketing strategies has been made by the synergy
that exists between artificial intelligence and marketing activities.

2.4.1. AI in Campaign Management

AI technologies have demonstrated significant potential in revolutionizing
campaign management by optimizing resource allocation and enhancing
strategic decision-making processes. AI algorithms facilitate real-time
analysis and forecasting, allowing marketers to adjust campaign parameters
and allocate budgets efficiently in response to changing market conditions
(Egorenkov, 2022). The integration of AI not only streamlines campaign
execution but also improves the accuracy of marketing decisions, driving
better engagement and enhancing customer experiences (Lyndyuk et al.,
2024b). For instance, Țîrcovnicu and Haţegan (2023) discuss how AI-
driven data analytics refine customer interactions, fostering a more effective
marketing environment across various sectors, including retail.
The effectiveness of AI in these domains stems from its ability to process
vast amounts of data and uncover insights that would be challenging to
identify manually. Heins (2022) and Arbaiza et al. (2024) emphasize that
AI can enhance campaign personalization by analyzing consumer behavior
patterns, enabling advertisers to deliver tailored messaging that resonates
with specific audience segments. This capability not only enhances user
engagement but also optimizes advertising spend, leading to improved
return on investment (ROI) (Ledro et al., 2022).
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2.4.2. Budget Optimization through AI

AI-driven budget optimization is another pivotal aspect that contributes
to the effectiveness of marketing campaigns. Businesses can utilize AI tools
to simulate different budget scenarios, allowing for data-driven decisions
on where to allocate resources for maximum impact (Egorenkov, 2022).
The predictive capabilities of AI can help organizations forecast campaign
performance based on historical data, leading to smarter financial decisions
that align with strategic marketing goals (Noranee & Othman, 2023). The
ability to forecast returns on marketing investments allows brands to allocate
budgets dynamically, ensuring funds are utilized in the most effective areas
of campaign execution.
Research shows that businesses leveraging AI for campaign management
not only maintain a competitive edge but also achieve higher levels of
automation and efficiency (Zancan et al., 2023). Organizations can automate
routine marketing processes, freeing up resources and enabling teams to
focus on strategic initiatives (Arbaiza et al., 2024). The insights garnered
from AI can inform everything from media buying strategies to content
creation, enhancing the precision of marketing actions and reducing wasted
spend in advertising.

2.4.3. Ethical Considerations in AI-Driven Campaigns

Even if artificial intelligence brings benefits for budget control and
campaign management, ethical issues have to be resolved to guarantee
appropriate AI application in marketing. Using personal data for targeted
advertising asks issues about customer privacy and consent, hence open
data policies are necessary to develop confidence with consumers (Adebayo,
2024). Organizations have to create thorough ethical rules to control the
use of artificial intelligence in marketing plans and maximize its advantages
without endangering consumer privacy or confidence, as Chang and Ke
(2023) emphasize.
Finally, the way artificial intelligence helps with budget control and
campaign management greatly improves the capacity of marketing teams
in the current environment of competitiveness. AI technologies are
becoming essential tools for marketers looking for accuracy, efficiency,
and ethical standards in their campaigns since they can analyze enormous
datasets, forecast results, and automate procedures. To completely realize its
transforming power in marketing, constant research and practice in artificial
intelligence must negotiate data security and ethical consequences.
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3. Ethical Dilemmas in AI-Driven Advertising

In the rapidly evolving landscape of AI-driven advertising, ethical
dilemmas have emerged as a subject of considerable concern among scholars
and practitioners alike. The integration of artificial intelligence in advertising
methods has led to significant advantages in personalization and efficiency,
but it also raises critical ethical issues, particularly surrounding consumer
privacy, algorithmic bias, and transparency. Camilleri (2024) implies, in
their research, that all those who are involved in the research, development
and maintenance of AI systems, have social and ethical responsibilities to
bear toward their consumers as well as to other stakeholders in society.
One prominent ethical issue in AI-driven advertising is the lack of
transparency regarding how AI algorithms function and make decisions.
Sometimes unaware that they are interacting with artificial intelligence
systems, consumers wonder about their autonomy and the possibility
of manipulation without informed permission. Many people may not
understand the consequences of being targeted by AI-driven adverts,
hence mistrust between customers and companies can result. (Kumar &
Suthar, 2024). Moreover, algorithmic bias raises another alarming aspect
since artificial intelligence systems can reinforce current society prejudices
seen in their training data. Such prejudices can result in biased advertising
methods, therefore supporting rather than questioning preconceptions. (N.
Singh, 2023; Ziakis & Vlachopoulou, 2023). Brands must take a proactive
approach in managing and auditing these algorithms to ensure fairness and
prevent the perpetuation of harmful biases. (N. Singh, 2023).
Another critical aspect concerns consumer data privacy. The use of
vast datasets allows AI algorithms to tailor advertisements to specific
consumer behaviors and preferences, yet it raises pressing questions about
data ownership and consent. Ethical marketing frameworks must navigate
the tension between maximizing personalized consumer experiences
and respecting individual privacy rights. As AI technologies scale, the
implications for data protection and ethical governance become increasingly
complex (Camilleri, 2023; Sharma, 2023). Business practices need to
prioritize transparency and accountability, ensuring that consumers can
make informed decisions about their data.
Moreover, how AI depicts women in advertising presents gender portrayal
and societal norm-related moral issues. The employment of female-presenting
chatbots and advertising characters to generate advertising personas
presents issues about the reinforcement of gender-related stereotypes. The
employment of AI has the capability to encourage diversity but must be
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employed prudently to avoid the reinforcement of gender-related stereotypes

within advertising strategies (Greguš & Škvareninová, 2023; Kriaučiūnaitė-
Lazauskienė, 2023). The responsibility lies with the advertisers to ensure
that AI tools are employed to encourage inclusivity rather than exclusivity
(Kriaučiūnaitė-Lazauskienė, 2023).
Overall, AI advertising has the potential to revolutionize marketing
strategies through enhanced personalization and efficiency but has complex
ethical challenges. These include defending consumer privacy, addressing
algorithmic bias, and ensuring gender equity in representations. Structuring
AI marketing strategies around ethical principles is crucial for maintaining
consumer trust and achieving sustainable advertising practices that reflect
societal values and norms.

3.1. Consumer Manipulation and Persuasion

Within the field of consumer behavior, the expression “Consumer
Manipulation and Persuasion” captures the tactics that marketers deploy
in order to influence the decisions that consumers make regarding their
purchases. There are two essential ideas that come to light under this
framework: “Exploiting Consumer Vulnerabilities” and “AI-Based Subconscious
Persuasion Techniques”.

3.1.1. Exploiting Consumer Vulnerabilities

Marketers often capitalize on consumer vulnerabilities, which can
range from emotional states to cognitive biases. Vulnerable populations,
including those experiencing stress, low self-esteem, or uncertainty, may be
particularly susceptible to persuasive techniques. For instance, advertising
can employ emotional appeals such as fear or guilt to prompt consumers to
make purchasing decisions that they are otherwise unwilling to undertake
(Hibbert et al., 2007). The effectiveness of such tactics relies upon consumers’
knowledge regarding persuasion tactics. If consumers are conscious that
an attempt to manipulate them has been made, then they are likely to be
defensive, perhaps diffusing the emotional appeal meant to be created
through the advertisement (Alenazi, 2015). Successful manipulation then
tends to balance the presentation of emotional appeals and the consumer
defenses based upon persuasion knowledge—the set of knowledge regarding
marketing tactics(Kirmani & Zhu, 2007).
Moreover, AI technologies have further changed the means through
which consumer susceptibilities can be exploited. Machine learning
algorithms scan consumer data to find emotional triggers and susceptibilities
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to allow marketers to produce advertising that targets the emotional states

and susceptibilities of specific consumers effectively(Hacker, 2021). This
targeting has an ethical issue because the practice has the possibility to create
an exploitative situation where consumers are directed toward making specific
choices through repeated reinforcement of susceptibilities unbeknownst to
them. Hence, consumer vulnerability exploitation has a two-edged sword
character: it can be employed to promote sales but has to be handled using
ethics to avoid manipulation.

3.1.2. AI-Based Subconscious Persuasion Techniques

AI-based subconscious persuasion techniques represent an innovative
intersection of technology and psychology that facilitates subtle influence
on consumer behavior. Marketers are increasingly deploying AI to create
environments where consumers are subtly guided toward specific products
without their conscious awareness. This approach often involves employing
persuasive cues that resonate unconsciously with consumers, thereby
bypassing their direct defenses (Isaac & Grayson, 2019). For example,
advertisements might utilize color psychology or other subliminal techniques
to provoke desired responses, influencing perceptions and purchasing
behavior at a subconscious level (Lim et al., 2020).
One fascinating aspect of AI-driven persuasion is its capacity to adapt
continuously based on real-time consumer behavior and interactions.
Algorithms can fine-tune advertising strategies by learning from consumer
reactions, optimizing the presentation of messages to elicit desired
subconscious responses (Hacker, 2021). However, this raises profound
ethical questions concerning informed consent and the potential for
manipulation. Consumers may not be aware of how their preferences are
shaped by AI, creating what some researchers term a “manipulation loop,”
where the technology’s influence perpetuates consumer vulnerabilities
without transparency (Ryu, 2024).
Furthermore, the application of persuasion knowledge becomes crucial
in understanding these subconscious techniques. Consumers equipped
with high levels of persuasion knowledge may become more vigilant
against AI manipulations, potentially leading to a backlash against brands
perceived to exploit such technologies for manipulation. Conversely, lower
levels of persuasion knowledge may leave consumers more susceptible to
subconscious influences, illustrating a critical area for further research and
ethical debate (Kirmani & Zhu, 2007).
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In conclusion, “Exploiting Consumer Vulnerabilities” and “AI-Based

Subconscious Persuasion Techniques” highlight the nuanced and sometimes
contentious relationship between marketing strategies and ethical consumer
engagement. As AI continues to evolve, understanding and navigating
these dynamics will be essential for both marketers and consumers,
fostering a marketplace that prioritizes ethical transparency and consumer
empowerment.

3.2. Privacy and Data Protection

In a society that is becoming more and more digital, privacy and data
protection have become top priorities especially with the development
of artificial intelligence (AI) and its uses in many different fields. The
vast capabilities of AI-driven tracking systems, which enable large data
collecting, are increasing the ethical consequences connected to consumer
privacy. Furthermore, more important than ever are legislative protections
against possible violations resulting from artificial intelligence technology
in advertising: the General Data Protection Regulation (GDPR) and the
California Consumer Privacy Act (CCPA).

3.2.1. AI-Driven Tracking Systems and the Risks of Mass Data

Collection
AI-driven tracking systems have revolutionized how businesses interact
with consumers by allowing unparalleled access to data on user behavior,
preferences, and interactions. Such systems utilize various methods, including
cookies, mobile app tracking, and social media monitoring, to collect vast
amounts of personal data. This mass data collection raises significant privacy
concerns, especially regarding how this data is stored, analyzed, and utilized
without obtaining informed consent from consumers (Arbaiza et al., 2024;
Xu et al., 2024).
The risks associated with these practices include potential breaches
of data privacy, unauthorized usage of personal information, and even
identity theft. When organizations gather substantial troves of data using
AI, they may inadvertently expose sensitive information, making it a target
for cybercriminals. As noted by Huda Huda et al. (2024), the regulatory
landscape still struggles to keep pace with technological advancements,
creating a gap where consumer privacy can be jeopardized and leading
to systemic vulnerabilities in how personal data is safeguarded (Idoko et
al., 2024). Thus, while AI facilitates better advertising and consumer
engagement, it also invites ethical and legal dilemmas about the extent and
manner of data collection (Eriksson, 2024).
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3.2.2. GDPR, CCPA, and the Ethical Violations of AI in

Advertising
The GDPR and CCPA represent critical legal frameworks designed to
protect consumer privacy rights. The GDPR, implemented in the European
Union, establishes stringent rules on data processing, requiring organizations
to collect personal data responsibly and transparently (Reddy et al., 2020).
Similarly, the CCPA provides California residents with the right to know
what personal information is collected, allowing them to opt out of data
sharing and enabling them to control the utilization of their data (Jin &
Skiera, 2022).
Despite these regulations, ethical violations often occur in the context
of AI in advertising. The potential for misalignment between consumer
expectations and how organizations utilize AI for targeted advertising
presents a significant challenge. AI systems may exploit loopholes in these
regulations or misinterpret consent, leading to instances where consumers
are unaware of how their data is being manipulated for commercial gain
(Hoxhaj et al., 2023). There is a growing concern that these advertising
practices can lead to ethical violations, where the consumer’s autonomy and
data rights are undermined, highlighting the need for stricter compliance
and accountability measures among organizations deploying AI technologies
(Williamson & Prybutok, 2024).
Furthermore, while health information, sensitive personal data, and
biometrics are particularly vulnerable, organizations often lack robust
mechanisms to safeguard this data effectively, leading to further ethical
and legal challenges (Murdoch, 2021) and raising questions about the
adequacy of current regulatory frameworks in addressing these complexities
comprehensively (Liu et al., 2024). Continuous monitoring and adaptation
of these laws are necessary to align with the rapidly advancing landscape of
AI technology and its impact on consumer privacy rights.
In conclusion, the intersection of AI and data protection is fraught
with challenges that necessitate a careful approach to consumer privacy.
Legal frameworks such as GDPR and CCPA must evolve alongside AI
advancements to ensure they effectively mitigate risks associated with data
collection and enhance ethical compliance in advertising practices.

3.3. Bias and Discrimination

Bias and prejudice within artificial intelligence (AI) provide substantial
ethical dilemmas with far-reaching consequences for people and society
at large. Algorithmic bias, a consequence of defective machine-learning
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methodologies, arises when AI systems unintentionally mirror prevailing

cultural preconceptions embedded in their training data. The systematic
review emphasizes the importance of ongoing research, highlighting the
complex interplay between bias, technological advancements, and societal
impacts. The thorough analysis emphasizes the complexities of bias in AI
algorithms, highlighting the critical importance of addressing these issues
in future developments(Fazil et al., 2023). This section explores two critical
aspects: “Algorithmic Bias and Its Ethical Implications” and “The Dangers
of Over-Personalization Limiting Consumer Options.”

3.3.1. Algorithmic Bias and Its Ethical Implications

Algorithmic bias refers to the systematic and unfair discrimination that
occurs when AI systems produce outcomes that are prejudiced against
certain groups, often based on race, gender, or socioeconomic status. This
bias can originate from various sources, including the datasets used to train
AI models, which may be unrepresentative or reflect historical biases (Fazil
et al., 2024; Min, 2023). For instance, predictive policing algorithms have
been criticized for disproportionately targeting minority communities due
to the biased historical crime data upon which they were trained (Min,
2023). The implications of this bias extend to various sectors, including
hiring practices, loan approvals, and healthcare diagnoses, posing ethical
concerns about fairness and equal treatment (Drage & Mackereth, 2022;
Osasona et al., 2024).
The ethical ramifications of algorithmic bias are extensive. When certain
demographics receive less favorable outcomes due to biased algorithms,
issues of justice and equity are called into question. This undermines
trust in AI technologies and raises concerns regarding accountability—if
an AI system discriminates, who is responsible? Moreover, the continued
implementation of these biased systems perpetuates existing inequalities
and has a cascading effect on public perception of technology (Ferrara,
2023; Sreerama & Krishnamoorthy, 2022). Addressing algorithmic bias
thus necessitates a multifaceted approach that includes not only technical
interventions, but also ethical guidelines and regulatory frameworks aimed
at ensuring equitable treatment for all groups (Fazil et al., 2024; Jobin et
al., 2019).

3.3.2. The Risks of Excessive Personalization Narrowing

Consumer Choices
Excessive personalization, while often touted as a means to enhance
user experience, can inadvertently narrow consumer choices through
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algorithmic filtering. When AI systems are designed to curate content

tailored to individual user preferences, they can lead to echo chambers where
consumers are exposed primarily to information and products that align with
their existing beliefs and desires (Chu et al., 2022). This phenomenon can
constrain the diversity of choices available to consumers, effectively limiting
their exposure to novel ideas or alternatives that do not fit their predefined
profiles (Aladeen, 2023).
The implications of this narrowing effect extend to areas such as
advertising, content consumption, and social media interaction. Research
has shown that as algorithms refine their targeting capabilities, they tend
to reinforce existing consumer behaviors rather than encourage exploration
and diversification (Christanto et al., 2024; Sun et al., 2020). As a result,
consumers may find themselves trapped within a narrow perception of
available options, which can adversely affect their decision-making processes
and overall satisfaction with their experiences (Xie & Huang, 2023).
Moreover, this excessive personalization raises ethical concerns regarding
autonomy and informed consent. Consumers may unknowingly surrender
their agency as algorithms dictate the scope of their choices (Rosales &
Fernández-Ardèvol, 2019). This is exemplified in the realm of targeted
advertising, where data-driven algorithms prioritize immediate sales over
delivering a broader spectrum of relevant alternatives. Ultimately, the risks
associated with excessive personalization necessitate a careful evaluation
of the balance between enhancing user experiences and maintaining the
integrity of consumer choice (Illia et al., 2022).
In conclusion, addressing bias and discrimination in AI involves a two-
pronged exploration of algorithmic bias and the risks posed by excessive
personalization. Both aspects highlight the need for comprehensive ethical
standards and regulatory measures to facilitate the deployment of AI
technologies in a manner that promotes fairness, transparency, and consumer
choice.

3.4. Autonomous Decision-Making in Advertising

Autonomous decision-making in advertising refers to the use of artificial
intelligence (AI) systems that operate independently or with limited human
input to create, manage, and optimize advertising campaigns. AI’s ability
to analyze vast amounts of data and execute complex strategies has led
to its growing use in advertising practices. This discourse focuses on two
primary areas: “AI Surpassing Human Decision-Making in Advertising
132 | Ethical Dilemmas in AI-Driven Advertising

Strategies” and “Ethical Concerns Regarding Consumer Autonomy and

Misinformation”(Lyndyuk et al., 2024a).

3.4.1. AI Surpassing Human Decision-Making in Advertising

Strategies
AI technologies have the potential to surpass human decision-making
capabilities primarily through their proficiency in processing large datasets
at speeds and accuracies unattainable by humans. This computational
superiority allows AI to analyze consumer behavior, preferences, and
engagement patterns, leading to highly targeted advertising tactics. For
instance, AI systems can predict market trends and optimize media spending
in real-time, leading to enhanced advertising effectiveness and cost-efficiency
compared to traditional methods (Kumar & Suthar, 2024; N. Singh, 2023).
As stated by Arbaiza et al. (2024) AI’s ability to handle predictive
analysis significantly improves campaign relevance by customizing content
to individual users’ needs and preferences. These advancements allow
marketers to segment audiences more effectively and deploy personalized
advertisements, maximizing engagement and conversion rates while
continuously learning from performance data (Kumar & Suthar, 2024;
N. Singh, 2023). Furthermore, AI’s capacity to manage multi-channel
campaigns ensures consistent messaging across platforms, an aspect that
can be challenging for human-managed strategies due to the complexity
involved. This shift toward AI-dominated decision-making is transforming
the advertising landscape, where speed and precision may outweigh human
intuition and experience.
However, there are limitations to AI’s effectiveness, particularly
concerning its reliance on historical data. If the training data is biased or
unrepresentative, the resultant advertising strategies could reinforce existing
stereotypes or create misleading narratives (Ziakis & Vlachopoulou, 2023).
Thus, while AI has the potential to enhance decision-making processes, it
is crucial to ensure that the data used for training is comprehensive and free
from bias to avoid undermining the ethical integrity of advertising outcomes.

3.4.2. Ethical Concerns Regarding Consumer Autonomy and

Misinformation
The escalation of autonomous decision-making in advertising raises
numerous ethical concerns, particularly regarding consumer autonomy
and the potential for misinformation. One of the primary issues is that
consumers may not be fully aware of how AI-driven advertisements are
 Serim Paker | 133

shaping their decisions. The overwhelming personalization capabilities of

AI can effectively manipulate consumer choices, often steering them toward
products or services that align with commercial interests rather than genuine
consumer need or desire (Ziakis & Vlachopoulou, 2023). As a result,
individuals might experience a diminished sense of agency, as they encounter
a narrowing range of choices predominantly influenced by AI algorithms
(Ziakis & Vlachopoulou, 2023).
Moreover, the utilization of misleading advertisements poses significant
risks of misinformation, particularly when AI systems are programmed
to prioritize clicks and engagement over factual correctness. Research
indicates that inaccurate information in advertisements can lead to
misguided consumer behaviors, ultimately affecting purchase intentions
and undermining informed decision-making (Singh, 2023; Ziakis &
Vlachopoulou, 2023). The propensity for AI-generated advertisements to
propagate misinformation further complicates the landscape, necessitating
robust scrutiny.
To address these ethical concerns, it is imperative to incorporate
transparency and accountability into AI-driven advertising practices.
Businesses must ensure that consumers are aware of how their data is being
used, adopting models that prioritize ethical marketing and empower
consumer autonomy (Kumar & Suthar, 2024; al., 2023). Implementing
explainable AI methods can enhance consumer comprehension of AI-
generated recommendations and advertisements, fostering trust and
improving decision-making processes. Furthermore, practicing stringent
checks on the veracity of advertisement claims can mitigate misinformation
risks and promote ethical standards in advertising (Camilleri, 2023; Sharma,
2023).
In conclusion, while autonomous decision-making in advertising
facilitated by AI offers remarkable advantages in efficiency and effectiveness,
it also necessitates a critical examination of ethical considerations related
to consumer autonomy and the dissemination of accurate information.
Balancing innovation with responsibility will be vital in ensuring that
advertising serves to enhance consumer experiences rather than compromise
them.

4. Cases: Unethical Uses of AI in Advertising

The exploration of unethical uses of artificial intelligence (AI) in
advertising unveils troubling case studies that illustrate serious ethical
dilemmas, privacy infringements, and manipulative practices. This analysis
134 | Ethical Dilemmas in AI-Driven Advertising

primarily delves into four significant cases: the Cambridge Analytica

scandal involving political microtargeting, Facebook’s AI-driven behavioral
advertising mechanisms, the rise of deepfake technology in advertising and
the associated ethical concerns, and the problematic use of AI chatbots that
engage in deceptive marketing practices.

4.1. The Cambridge Analytica case, which came to light in 2018,

is emblematic of the disturbing intersection of data privacy and political
advertising (Corrêa et al., 2023). The company exploited personal data
acquired from millions of Facebook users without their consent to create
detailed psychological profiles and execute tailored political campaigns. This
microtargeting strategy raised profound ethical questions regarding user
consent and data ownership, exposing vulnerabilities within the regulatory
frameworks governing data privacy (Chouaki et al., 2022).
The unethical manipulation of such data facilitated the dissemination
of targeted misinformation and played a significant role in shaping the
political landscape during elections (Ali et al., 2019). Cambridge Analytica’s
practices prompted increasing scrutiny and calls for reform in political
advertising, leading to legislative measures intended to protect users from
similar exploitative strategies in the future (Eriksson, 2024).
 Serim Paker | 135

4.2. Facebook’s AI-driven behavioral advertising mechanisms

further complicate the ethical landscape of digital marketing. The platform’s
algorithms optimize advertisement delivery based on user engagement and
preferences inferred from vast quantities of personal data. However, these
practices often lack transparency, leading to issues such as discrimination and
manipulation of user sentiment (Andreou et al., 2019). Research suggests
that while Facebook aims to connect advertisers with relevant users, this
often leads to echo chambers that reinforce existing beliefs and biases,
fostering political polarization (Cotter (Cotter et al., 2021)et al., 2021).
The opaque nature of ad targeting erodes trust among users and raises social
responsibility concerns regarding how advertisers can exploit algorithmically
derived data to shape perceptions and behavior without user awareness (Ali
et al., 2019).

4.3. The advent of deepfake technology has introduced another layer

of ethical complexity in advertising. Deepfakes, which employ AI to create
hyper-realistic yet fictitious representations of individuals, present significant
risks in terms of misinformation and deceptive advertising practices (Pizzi
136 | Ethical Dilemmas in AI-Driven Advertising

et al., 2023). This technology raises ethical concerns about authenticity and
consumer trust as advertisers might use deepfakes to present misleading
narratives or endorsements from individuals without their consent (Wiese et
al., 2020). The potential for deepfakes to fabricate celebrity endorsements or
mislead consumers about product efficacy poses risks not just to individuals
but also undermines the integrity of brands and the advertising industry as
a whole (Pizzi et al., 2021). The deceptive nature of such representations
necessitates strict regulations to address the ramifications of false advertising
and protect consumers from manipulative practices (Kish, 2020). The
earliest example of manipulated multimedia content oc-curred in 1860 when
a portrait of southern politician JohnCalhoun was skillfully manipulated
by replacing his head with that of US President for propaganda purposes
and evolved rapidly until present(Masood et al., 2022). The timeline of key
developments can be seen at Figure1.
Figure1. Timeline of Key Developments.

4.4. AI chatbots, which have become increasingly prevalent in

marketing, also present ethical dilemmas through manipulative practices.
These chatbots, often programmed to engage users and facilitate
transactions, may employ strategies to influence consumer behavior without
disclosing their artificial nature. Studies indicate that chatbots can foster
relationships with consumers that blur the lines between human interaction
and AI engagement, often to the latter’s advantage (Arbaiza et al., 2024).
For example, the anthropomorphism of chatbots—giving them human-
like traits—can lead consumers to lower their defenses, making them more
susceptible to marketing tactics that might otherwise be viewed skeptically
(Pizzi et al., 2023). This degree of manipulation necessitates a balanced
 Serim Paker | 137

approach that embraces technological advancement while upholding ethical

standards in consumer interactions.
In conclusion, the unethical uses of AI in advertising highlight significant
challenges regarding privacy, transparency, and consumer protection. Each
case study demonstrates the necessity for frameworks that ensure ethical
practices in the use of AI technologies in marketing. The convergence of
technological innovation and ethical responsibility forms the basis for re-
evaluating advertising strategies, emphasizing the need for regulatory
oversight that protects consumers and fosters trust in digital marketing
landscapes. These illuminating case studies reflect critical issues that demand
scholarly attention and policy intervention to safeguard public interests in
the evolving world of AI-powered advertising.

5. Ethical AI Advertising Framework: Principles and

Recommendations
The following are some of the recommendations that could be put into
consideration.

5.1. Transparency & Explainability

As advertising increasingly incorporates AI-driven techniques,
transparency becomes paramount. Consumers should be empowered to
understand how algorithms influence the ads they encounter. Explainability
relates to the ability to uncover how decisions are made in AI systems,
allowing stakeholders to grasp the inner workings of these models (Cary et
al., 2024). Research emphasizes the importance of clear communications
from companies regarding the algorithms they employ, including the data
inputs that drive ad placements (Sreerama & Krishnamoorthy, 2022).
Practitioners must aim for transparency not merely as a compliance measure
but as a fundamental principle of ethical practice in AI advertising (Mehrabi
et al., 2019). By promoting informed consumer consent, organizations can
foster trust and accountability within the advertising ecosystem (Fletcher et
al., 2021).

5.2. Fairness (Equity) & Bias Mitigation

Maintaining fairness is not only a basic need of ethical artificial
intelligence in marketing but also an optional extra feature. The algorithms
themselves and the data used for training are among the several sources
of bias that might mirror society prejudices (Bellamy et al., 2019; Ferrara,
2023). Methods such as fairness metrics enable one to evaluate the equity
138 | Ethical Dilemmas in AI-Driven Advertising

of AI advertising systems by means of which one can spot and minimize

disparities (Albaroudi et al., 2024). Attaching fair results requires effective
strategies including data preprocessing, algorithmic transparency, and
varied representation (Sreerama & Krishnamoorthy, 2022). To address the
complexity of bias in artificial intelligence systems (Bellamy et al., 2019),
an interdisciplinary approach comprising cooperation among technologists,
advertisers, and social scientists is absolutely essential.
Data Privacy and Consumer Control
Using artificial intelligence in advertising magnifies consumer data
privacy issues and calls for strict data protection policies. Consumers have to
keep control over their personal data and make wise decisions on the usage
of it (Zhao, 2024). Regulatory frameworks should mandate organizations
to implement robust data governance practices that respect consumer
preferences, minimizing risks related to data misuse (Cheong et al., 2023;
Tillu et al., 2023b). By means of data for advertising personalization,
the integration of technologies like anonymization and encryption
helps to strengthen privacy measures so ensuring ethical standards are
maintained(Tillu et al., 2023a). Maintaining consumer autonomy will not
only help to increase the legitimacy of advertising markets but also encourage
adherence to legal rules about data privacy (Padmanaban, 2024).

5.3. Regulatory Compliance and Corporate Liability

Organizations have to keep ethical standards going beyond simple
compliance while matching their AI advertising practices with current
legal systems. Companies should aggressively modify their strategies
to fit regulatory needs and build a culture of corporate responsibility as
the terrain of AI control is fast changing (Chin et al., 2023; Tillu et al.,
2023b). This covers following accepted ideas of justice and responsibility
as well as creating an environment that gives ethical issues top priority for
the application of artificial intelligence technologies(Padmanaban, 2024).
Companies can reduce the risks related to algorithmic bias and help to build
public confidence in AI systems by actively participating in compliance and
proving social responsibility (Albaroudi et al., 2024; Mullankandy, 2024).

5.4. Ethical AI Design in Advertising Algorithms

The design of AI algorithms must prioritize ethical considerations from
inception through to deployment. This involves incorporating fairness
metrics and bias mitigation strategies within the algorithmic design process
(C. Singh, 2023). A commitment to ethical AI design encourages the
 Serim Paker | 139

development of algorithms that reflect equitable values and serve diverse

audiences without perpetuating discriminatory practices (Adeyelu et al.,
2024). Additionally, the ongoing assessment and improvement of these
systems are essential to adapt to societal changes and emerging ethical
standards (Xu et al., 2022). By embedding ethical principles into the core
framework of AI advertising technologies, organizations can enhance their
competitiveness while contributing positively to the societal impact of
advertising practices (Mehrabi et al., 2019).

6. Final Thoughts and Suggestions for the Future

Through improvements in personalization, automation, and data-driven
decision-making, advertising that is powered by artificial intelligence has
significantly altered the state of the marketing landscape. But the rapid pace
of its development has given rise to ethical concerns regarding the privacy
of consumers, the bias of algorithms, the dissemination of false information,
and transparency. To address these challenges, a balanced approach is
required, one that makes use of the potential of artificial intelligence while
also placing an emphasis on ethical standards and consumer trust.
Regulatory frameworks need to undergo evolution in order to provide
more transparent guidelines for the responsible application of artificial
intelligence in advertising. The incorporation of proactive bias mitigation
strategies, stronger data protection mechanisms, and transparency in
decision-making processes driven by artificial intelligence should be
established as part of marketing practices. To ensure that the deployment
of artificial intelligence is conducted in an ethical manner, it is necessary
for policymakers, developers of AI, and marketers to work together across
disciplines.
The long-term societal impact of artificial intelligence in advertising
should be investigated in future research, with a particular focus on the
impact it has on the autonomy and decision-making of consumers. In order
to shape an advertising ecosystem that is both sustainable and responsible,
it will be essential to develop artificial intelligence systems that are in
accordance with ethical principles while maintaining efficiency.
140 | Ethical Dilemmas in AI-Driven Advertising

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