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AI Advertising and the Innovation Trade-Off : Evidence from SMEs on an E-Commerce Platform

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As artificial intelligence (AI) advances, e-commerce is evolving through the emergence of personalized services, automated advertising, and data-driven decision-making. In the digital commerce environment, AI enables small and medium-sized enterprises (SMEs) with limited capital to reduce advertising costs and pursue both short-term sales growth and long-term brand development. As a result, AI functions as a critical operational tool that enhances business efficiency and fosters sustainable innovation. This study empirically examines the impact of AI advertising on internal innovation outcomes within SMEs. Our preliminary results show that the adoption of AI advertising has a positive influence not only on financial performance (e.g., sales growth and cost reduction) but also on internal innovation outcomes (e.g., product diversification). Specifically, AI-powered advertising strengthens customer loyalty and strengthen brand awareness through data-driven segmentation and personalized targeting, while simultaneously improving the innovation capabilities of SMEs. The study contributes to the literature by empirically investigating the role of AI advertising in stimulating business innovations within the SME context. Furthermore, our findings provide managerial insights by emphasizing that AI advertising serves as a capability for reducing costs, enhancing customer experience, and promoting internal innovation.

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저자정보

  • Daeun Jeong Korea University Business School, Information Systems
  • Gunwoong Lee Korea University Business School, Information Systems

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