AI-based personalized advertising on social media provides consumers with tailored information that reduces search time and enhances convenience, yet simultaneously raises concerns about privacy intrusion. This study examines how consumers’ perceived personalization influences their intention to click on advertisements and investigates the mediating roles of perceived usefulness and privacy concerns, as well as whether consumers’ perceptions of platforms’ compliance with Fair Information Practices (FIPs) moderate the relationships between perceived personalization, perceived usefulness, privacy concerns, and click intention. Data were collected through an online survey of 297 adults in their twenties. The results showed that perceived personalization positively affected both perceived usefulness and privacy concerns. Perceived usefulness had a positive effect on click intention, whereas privacy concerns did not have a statistically significant effect on click intention. In addition, perceived usefulness and privacy concerns mediated the relationship between perceived personalization and click intention. Furthermore, consumers’ perceptions of platforms’ compliance with FIPs showed different moderating effects across sub-dimensions in the relationship between perceived personalization and consumer responses. These findings suggest that perceptions of FIPs compliance may influence consumers’ privacy perceptions and responses to personalized advertising. This study contributes to a more refined understanding of the effects of AI-based personalized advertising on social media and highlights that platform-level compliance with FIPs can serve as an important institutional factor in explaining consumer responses to personalized advertising.