AI and machine learning make it easy for digital marketing to provide real-time personalized experiences, recommendations, and content. This study examines how hyper-personalization influences two significant brand elements relationships: trust and brand loyalty, given the rising issues surrounding data privacy and transparent algorithms. Drawing on consumer behavior and confidence formation, the study raises the question: Does extreme personalization result in deeper brand involvement, or does it feel too intrusive? We answer our question by looking at survey results from 500 online buyers and listening to the insights of digital marketing experts. The report studies how clear information, user consent, and the benefit of personalized marketing affect people’s reactions to these offers. First, indications show that using personalization ethically can increase customers' loyalty to a brand, though failing to respect data may have the opposite effect. Ultimately, the research aims to offer a practical and ethical framework for using AI in personalized marketing that balances innovation with respect for consumer autonomy and privacy.