The Impact of Artificial Intelligence and Social Media Marketing on Consumer Behavior
This paper explores the profound structural change of contemporary commercial ecosystems engendered by the technological combination of AI and Social Media Marketing (SMM). Combined with some novel theoretical concepts, such as the Stimulus-Organism-Response (S-O-R) theory and Customer Engagement (CE) theory, this study describes how hyper-personalized algorithms and electronic Word of Mouth (eWOM) affect consumer cognition and behaviour. This paper links this behavioural change to the financial outcomes, such as Customer Acquisition Cost (CAC) and Customer Lifetime Value (CLV). This paper shows that paid digital channels give a short burst of visibility, but an organic-dominant growth mode promises the CLV/CAC ratio to be far better than one at any cost. This paper ends with conclusions that ethical transparency and multi-channel attribution models are useful tools for organizations that want to achieve organic growth in an automated digital environment.