How To Implement Hyper-personalization Without Creeping People Out
A Practical Guide to AI-Driven Hyper-personalization
The Personalization Paradox: We're All Hypocrites
We say we hate it when apps track us.
But we also get annoyed when Netflix forgets we don’t enjoy documentaries about feet, Spotify forgets we’re in a sad autumn phase, or ChatGPT forgets that we do, in fact, like our photos in Ghibli style.
This contradiction is reshaping product strategies in 2025.
And there, caught in this logical pretzel sits a product team, dark circles under their eyes, weighing options that initially look like this:
Collect data → backlash → failure
Don’t collect data → user churn → failure
Bet on ethics before making money → too expensive → failure (but with moral high ground intact)
But there is a better way.
Lessons From the Build Zone
I spiraled down the privacy rabbit hole so many times, it sometimes felt like I lived there. And I’m not alone, many product teams I speak to have their own version of that spiral.
The learning curve was steep, paved with second guesses. Looking back, I wish a magical ethics shaman had materialized in front of me and handed me a blueprint:
“This is where it gets tricky. This is how to deal with it. And this is how to turn ethics into a competitive advantage.”
But he didn’t appear. So I learned by fumbling forward. Today, I’m sharing some of those lessons with you.
Quick Download
This post is for anyone considered a product person: PMs, founders, designers, marketers and anyone making decisions that shape user experience.
What hyper-personalization actually means
Why product teams are stuck in a creepy catch-22
What they can do about it and what happens if they don’t
What is Hyper-personalization?
Hyper-Personalization means using real-time data, behavioral signals and predictive analytics to adapt the product experience for each individual.
Not per segment, not per persona - per person.
It’s Netflix tweaking your recommendations based on your recent watches (and giving your partner different ones when they log into their own profile)
It’s Tesla adjusting your seat
It’s Instagram showing you 43 reels of people sensually stroking fabric swatches because you hovered too long over a photo of a green velvet couch
It’s Grammarly telling you how many commas you forgot this week and asking why you ignored 294 previous suggestions
It’s Nike letting you to build custom sneakers through the Nike By You canvas
At the core, personalization is about being useful.
When done right: it feels magical, brings joy, and builds loyalty.
Spotify’s hyper-personalization engine fosters deep emotional connections and user loyalty, creating individualized listening experiences that have a global appeal.
-
(AI with Ash)
When done wrong: it’s perceived as manipulation, fractures trust and can cause your company millions (See examples such as Mattel’s Barbie below).
If not done at all: you risk becoming irrelevant. Offering generic experiences is very 1990s.
As privacy researcher
from Beyond The Firewall notes:‘‘The real privacy risk isn’t just what data you collect—it’s what the system infers about users without them realizing it. Personalization becomes surveillance the moment insights outpace user awareness.’’
Here lies the core dilemma: creating delightful experiences without crossing into creepy territory.
Why Product Managers Must Build For Trust
As product people, our whole job is to build things that give people what they need and want, ideally before they even know it themselves.
It sounds like a simple, feel-good mission, but personalization makes that tricky.
The more tailored the experience, the more data we need:
Click patterns
Purchase history
Micro-interactions
Cross-device memory
Deep behavioral data
And the more data we need, the more likely users are to feel like they’re being surveilled.
It's an ethical minefield, and product teams are right in the middle of it, sitting somewhere between Delight Me and Don’t track me.
So we must design products for for both: delight and trust.
According to venture capitalist
from Xartup Spotlight:VC lens: Experiences that are meaningful, personalized, and ethically delivered are the sweet spot.
A Checklist for Ethically Anxious PMs
1. Identify Internal Experts
Start by mapping internal stakeholders who understand your company's personalization systems, and care about doing it ethically.
Look for expertise in:
Data collection and management
Personalization algorithms and AI
UX implications
Ethical frameworks
Privacy laws and compliance
No clear experts?
Find adjacent voices: data scientists, UX researchers, privacy leads, PMs. Form a working group. You don’t need perfection, just a few curious minds willing to explore the tradeoffs.
2. Ask Smarter Questions
Run this workshop:
⚡️Ask Before You Personalize - Free Workshop Guide⚡️
It’s a 90 min workshop for teams who want hyper-personalization done right.
3. Audit for the ‘‘Creepy Factor’’
Ask yourself:
Are there any features that revealing more than users expect?
Can users understand why and how their data is used?
Is consent explicit, revocable and respected?
Are there any manipulative nudges dressed as personalization?
You’ve crossed the line if:
You sell data to third parties (👎 forever)
Data feels weaponized
Consent was buried in 27 pages
The system reveals more than users knew they shared
4. Build An Ethical Personalization Framework
Your North Star: Radical, unapologetic transparency.
Privacy, Transparency and Explainability by Design
Most users will trade some data for convenience—but only if they feel in control. The moment that control disappears, so does the trust
(Beyond The Firewall)
Be clear about what data will and won’t be used for
If you can’t explain it to a 10-year-old, you’re not there yet.
Let users opt in and control their personalization
Collect only the data needed to deliver real value
Explain data use in-context (“Why You’re Seeing This” moments)
Privacy-Preserving AI
Use Differential Privacy to add noise to data so individuals can’t be identified
Use Federated Learning to train models without moving data around the globe
Use tools like TensorFlow Privacy
Join ethical AI communities, such as OpenMined.
So How Can Ethics Be a Competitive Advantage?
If you live in Europe, you already know ins and outs of this debate regulation landscape.
Between GDPR, the ePrivacy Directive, and the EU AI Act, ethics is the price of entry. And all signs point to other continents following Europe’s lead: North America, LATAM, and parts of Asia are already drafting parallel frameworks. The companies that understand it are outpacing competitors.
Ethical AI is emerging as a strategic advantage. In sectors like finance and healthcare, responsible AI practices are increasingly influencing procurement decisions.
-
(The AI Ethics Brief)
When Smart Products Act Dumb
Mattel’s Barbie Scandal
Mattel’s Hello Barbie was pitched as a smart, chatty doll, but what it really did was stream kids’ voices to the cloud. It sparked public outcry, with critics calling it a privacy nightmare and accusing Mattel of eavesdropping in children’s bedrooms and recording conversations for commercial gain.
Target's Pregnancy Prediction Incident
Target’s algorithm made headlines after accidentally outing a teenager’s pregnancy to her dad by sending her baby coupons before she’d told anyone. The backlash sparked a global conversation on data ethics, consent, and the dangers of knowing your users too well. It’s now a textbook case of personalization gone too far.
Wish's Secret Price Discrimination
Wish got caught quietly changing prices based on where you live, without telling anyone. Regulators ruled it a violation of EU law, forcing them to shut down personalized pricing across the region. As one researcher put it: “If one company could get away with it, they’d all do it tomorrow.”
Key Takeaways
Hyper-Personalization tailors experiences in real time using behavioral, predictive, and contextual data
Users expect it, but not at the cost of trust
Product teams can delight without creeping people out, even with complex AI in the mix.
Big thanks to
for generously contributing quotes to this article! Go check out his work, it’s well worth the read.
You Might Also Enjoy
👉 What happens if you ignore ethics: Fix Your AI Ethics After Lunch, Not After Launch
👉 How Netflix handles personalization: A Brief History of Netflix Personalization by
👉 My most popular article: Substack Roadmap and Why ‘‘No, Substack, We Don’t Want Reels Went Viral’’
Other Sources
Maundrill, Beth. “Barbie's Data Privacy Scandal.” Infosecurity Magazine, 27 July 2023, https://www.infosecurity-magazine.com/blogs/barbies-data-privacy-scandal/.
AIAAIC. “Target Predicts Teen Girl Pregnancy.” AI, Algorithmic and Automation Incidents Repository, March 2023, https://www.aiaaic.org/aiaaic-repository/ai-algorithmic-and-automation-incidents/target-predicts-teen-girl-pregnancy.
Rana, Mansi. “AI-Driven Hyper-Personalization – The Future of Customer Experience.” Mansi Rana, 21 Mar. 2025, https://mansirana.com/ai-driven-hyper-personalization/.
Netflix Research. Recommendations. Netflix, https://research.netflix.com/research-area/recommendations.
Malireddi, Sri. “Unlocking Personalization With an On-Device Model for the Grammarly Keyboard.” Grammarly Blog, 10 Oct. 2024, https://www.grammarly.com/blog/engineering/personal-language-model/.
Zieminski, Karo. User Personas Are Dead: AI-Powered User Models for 2025 and Beyond. Product With Attitude, 4 May 2025, https://karozieminski.substack.com/p/user-personas-are-dead-ai-powered.
IEEE Digital Privacy. “What Is Differential Privacy?” IEEE Digital Privacy, https://digitalprivacy.ieee.org/publications/topics/what-is-differential-privacy.
Post Receipt
⚡️ I care deeply about the quality and relevance of my work and want to be transparent about how I get there.⚡️
Coffee Club Rewards!
Thank you for supporting this newsletter! If you find it valuable, consider buying me a coffee ☕️
When you buy me a coffee, you get:
1 public shoutout, because you're a legend and I believe in karma ➔ examples
1 month free when I launch paid ➔ remember to include your Substack email!
A loyal supporter of your publication ➔ drop it in my Subscriber Chat!
This is so good and extremely relatable. I like that you have portrayed it as not a zero sum game.
Also “Audit for the creepy factor”. Loved this!
It’s wild how your brain connects things—was not expecting to see the word “feet” in this post, but here we are lol 😂. Your writing is both compelling and actionable. I just subscribed.