Abstract:

This research investigates the transformative role of artificial intelligence (AI) technologies in digital advertising in Nigeria. Using survey and case study methods across key sectors including fintech, e-commerce, and telecommunications, the study examines the challenges of inefficiencies such as ad fraud, budget misallocation, and poor targeting in a global landscape where digital ad spending surpasses $700 billion. Nigerian marketers are under pressure to produce effective campaigns while minimizing the waste of resources. The study results demonstrates, with confidence, that the use of AI techniques including reinforcement, natural language processing (NLP), and predictive analytics can improve audience segmentation, dynamic bidding, and personalized ad content. About 63% of the respondents stated that they are using AI tools (38% partly, 25% completely) and they were able to show evidence of an improvement in cost-per-click (CPC) and return on ad spend (ROAS). However, the high cost of these implementations, lack of technical skills, and ethical issues such as data privacy violations and algorithmic bias impede the broad widespread adoption of AI. Only 22% of organizations in the researchers sample were in complete compliance with Nigeria's data protection regulations, while over one third of AI systems displayed socioeconomic or cultural bias. This research work contributes to literature by providing a contextual understanding of AI-based advertising in a developing economy and specific sectorial insights. It suggests that AI implementation should be phased starting with low-resourced AI tools, and investments in local AI capacity and explainable-AI (XAI) practices to develop transparency and accountability. Ultimately, the study highlights and suggests a strategic and ethically led approach to integrating AI into digital advertising in order to maximize inclusive innovation and efficiencies in campaigns for emerging markets such as Nigeria.