The introduction of Artificial Intelligence (AI) has fundamentally transformed digital advertising, advancing precision, efficiency, and scalability far beyond the capabilities of traditional advertising methods. This paper presents a detailed analysis of AI’s integration into the advertising sector, focusing on critical technologies, including multi-touch attribution (MTA), reinforcement learning (RL), recommendation systems (RS), and large language models (LLMs). We examine the evolution of AI in digital marketing, explore current trends, and assess emerging technologies such as federated learning and transfer learning, emphasizing their role in real-time ad personalization, campaign optimization, and enhanced user engagement. Through an exploration of AI-driven strategies used by major corporations such as Google, IBM, and Coca-Cola, this paper underscores AI’s transformative impact on advertising and anticipates future trends that may further revolutionize the field. Additionally, we address key challenges of deploying AI at scale, including issues of interpretability, ethical considerations, and data privacy, offering potential solutions.