Integration of Generative AI and Digital Content Marketing on Customer Engagement in Creative MSMEs: The Mediating Role of Perceived Content Value

Abstract

The generative artificial intelligence (Gen-AI) revolution presents transformative opportunities for creative Micro, Small, and Medium Enterprises (MSMEs) to produce textual and visual marketing assets at scale with unprecedented efficiency. However, automated content generation is frequently challenged by concerns over diminishing local authenticity and emotional resonance, potentially alienating customer engagement. This study investigates the impact of Generative AI integration and digital content marketing on customer engagement in creative MSMEs, examining perceived content value as a mediating mechanism. An explanatory quantitative survey was administered to 220 active social media followers and patrons of creative MSME business accounts (local fashion, artisanal crafts, and specialty culinary products) in North Sulawesi. The empirical data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) in SmartPLS 4.0. The results demonstrate that Generative AI integration (β = 0.365, p < 0.001) and digital content marketing (β = 0.438, p < 0.001) significantly enhance perceived content value. In turn, perceived content value substantially fosters customer engagement (β = 0.528, p < 0.001) and serves as a complementary mediator bridging Gen-AI integration (β = 0.193, p < 0.001) and content marketing (β = 0.231, p < 0.001) to engagement outcomes. The structural model explains 53.8% of the variance in perceived content value (R² = 0.538) and 63.4% in customer engagement (R² = 0.634). These insights highlight that AI automation must be paired with cultural curation and informational relevance to sustain vibrant community interactions.