The Transformative Role of AI in Advertising and Marketing

From Data-Driven Practices to Virtual Experiences

Authors

DOI:

https://doi.org/10.32674/2q7y1a35

Keywords:

Artificial Intelligence, customer segmentation, explainable AI (XAI), hyper-personalization, metaverse, predictive analytics

Abstract

Artificial Intelligence (AI) has fundamentally transformed advertising and marketing by enabling data-driven hyper-personalization and predictive capabilities. This systematic literature review, based on 98 peer-reviewed studies (2018–2024) and guided by PRISMA, explores AI’s evolving role, from analyzing consumer behavior to enabling automated ad creation, dynamic segmentation, and real-time optimization. Findings reveal that AI enhances conversion rates while reducing costs by leveraging tools like generative AI for text/visual ads and predictive analytics for customer insights. The study highlights AI's shift from transactional to relational marketing, emphasizing its capacity to foster long-term customer relationships through personalized messaging and immersive Metaverse experiences. However, challenges such as algorithmic bias, privacy concerns, and SME adoption barriers persist, necessitating ethical frameworks like Explainable AI (XAI) for transparency. The study extends Relationship Marketing and Resource-Based View (RBV) theories to AI-driven environments and offers practical guidance on integrating AI while preserving human creativity.

 

Author Biographies

  • Ramakrishnan Ramachandran, Vivin Consultants, Chennai

    Ramakrishnan, PhD in Stakeholder Management, is a diplomat turned passionate research-oriented teacher with wide and varied experience in the Indian Government /Private Enterprise. He has been associated with the founding of four B schools. Author of six books ranging from TQM to Environmental Science to Ethics, he has written close to 100 papers. His research work (http://ssrn.com/author=646193) ranges from Mentoring to Marketing as he tries to give shape to the future managers of India.

     

  • Sruthi Pillai, Texila American University, Coimbatore

    Sruthi Pillai, PhD in Green Marketing, is a passionate teacher and learner. Working as Adjunct faculty at Texila American University. Coimbatore. She has published 20 papers in various national and international journals. Her area of interest is Marketing, HR, and General Management.

  • Ram Krishna Dahal, Tribhuvan University, Nepal

    Ram Krishna Dahal is an Assistant Professor at the Central Department of Computer Science, Tribhuvan University, Nepal, and the CEO of Model Institute of Technology (MIT), Nepal. An aspiring and emerging scholar, his academic and professional pursuits focus on advancing technological innovation, education, and research. He actively contributes to interdisciplinary studies and institutional development in Nepal’s higher education and ICT sectors.

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Published

2025-07-02

Issue

Vol. 4 No. 1 (2025): Interdisciplinary Journal of Innovation in Nepalese Academia

Section

Research Articles

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Copyright (c) 2025 Interdisciplinary Journal of Innovation in Nepalese Academia

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How to Cite

The Transformative Role of AI in Advertising and Marketing: From Data-Driven Practices to Virtual Experiences. (2025). Journal of Innovation in Academia , 4(1), 27-45. https://doi.org/10.32674/2q7y1a35