Why hyper-personalized marketing isn’t working

The rapid rise of AI-powered personalization in marketing may be reaching a critical inflection point where diminishing returns and consumer skepticism outweigh the benefits. Despite technological advances enabling unprecedented targeting capabilities, evidence suggests that hyper-personalized marketing isn’t necessarily creating more meaningful connections with consumers. This emerging disconnect between marketing technology capabilities and actual consumer engagement highlights a potential need to rethink fundamental approaches to brand relevance and consumer trust.

The big picture: The marketing industry has enthusiastically embraced increasingly personalized approaches enabled by AI, but evidence suggests this strategy may be delivering diminishing returns while consumer trust erodes.

• Only 31% of consumers report that ads on social media capture their attention, despite sophisticated targeting algorithms.
• The article’s author suggests that “hyper-targeting a consumer doesn’t make a brand relevant. It just makes spam more specific.”

Behind the numbers: Consumer skepticism toward personalized digital advertising has reached concerning levels for marketers.

• 62% of consumers don’t trust digital ads, indicating a significant credibility gap.
• Only 13% of people believe brands have their best interests at heart, undermining the effectiveness of even well-targeted messaging.
• Meanwhile, 75% of Alphabet’s revenue comes from advertising, demonstrating the massive financial stakes in this ecosystem.

The implications: The current trajectory of marketing personalization may be creating a technological arms race that misses the more fundamental elements of effective brand communication.

• As personalization technology becomes more sophisticated, the focus on targeting mechanics may be overshadowing the need for compelling brand stories and authentic connections.
• The article suggests marketers should instead prioritize developing brave points of view and creating ideas people want to discuss.

Where we go from here: Rather than doubling down on hyper-personalization, brands may need to rebalance their approach toward building broader trust and cultural relevance.

• Showing up in surprising, non-digital contexts might help brands break through consumer ad fatigue.
• Rebuilding brand trust appears to be a more fundamental challenge than improving targeting precision.
• Marketers should consider whether personalization is serving as a technological distraction from more essential aspects of brand building.