Abstract
The rapid expansion of the gaming market and increasing user engagement have prompted marketers to integrate advertising into game environments. With advances in generative artificial intelligence (AI), in-game advertising can achieve unprecedented levels of personalisation. However, while highly personalised AI-generated in-game advertisements may enhance relevance and advertising effectiveness, they may also trigger privacy concerns and perceptions of surveillance, resulting in negative outcomes toward advertising and brands. Despite growing industry adoption, academic research on AI-generated in-game advertising remains limited. This developmental study aims to investigate how the personalisation of AI-generated in-game advertising influences consumer behaviour. Drawing on Affective Transfer Theory, the study will examine the relationship between ad personalisation and brand-related outcomes. Furthermore, grounded in Narrative Paradigm Theory, it will investigate whether the content format of privacy policy disclosures (narrative vs. non-narrative) moderates people’s perceptions. The findings aim to advance research on AI-generated advertising, data transparency, and digital gaming environments.