The integration of artificial intelligence (AI) in social media marketing has enabled new frontiers of personalisation, allowing brands to tailor content, advertising, and user experiences in real time based on behavioural, demographic, and psychographic data. This study synthesizes recent research on the applications, benefits, and ethical challenges of AI-driven personalisation within social media environments. It explores how AI facilitates consumer segmentation, dynamic content delivery, and influencer alignment, while also raising critical concerns related to privacy, algorithmic bias, transparency, manipulation, and user autonomy. The paper employs a thematic analysis to identify key opportunities such as enhanced engagement, operational efficiency, and predictive adaptation. It also examines the complex ethical implications emerging from algorithmic personalisation practices. The study concludes with a proposed research agenda and practical recommendations focused on ethical design, regulatory innovation, and user empowerment in the evolving landscape of AI-enabled marketing.