AI in Advertising: Tools and Technologies You Should Know

It seems like every week, there’s a new AI tool promising to revolutionize advertising—automate this, optimize that, triple your ROAS overnight. If you're feeling overwhelmed or even a bit skeptical, you're not alone.

AI is being hailed as the future of marketing, but for many advertisers, the real question is: 

Which tools actually work, and which ones are just smoke and mirrors?

The reality is that while not every AI product lives up to its promise, the right technologies can make a serious impact. From ad copywriting and creative testing to real-time bidding and budget optimization, AI is quietly reshaping how campaigns are built, launched, and scaled.

But success doesn’t come from blindly plugging into the latest platform; it comes from understanding what the tools do, where they add value, and how to use them strategically.

Today, we'll break down the key AI marketing tools and strategies that are truly moving the needle in advertising today. This guide will help you separate the signal from the noise and figure out where AI can genuinely work for you.

How is AI used in advertising?

AI is being used in advertising to do what humans can’t easily do at scale: analyze massive amounts of data, adapt in real time, and personalize content at the individual level. While some organizations think AI will replace marketers entirely, its sweet spot lies in amplifying what they can do.

It can help create ad copy, optimize visuals, predict which creatives will perform best, and even decide where and when to show each ad for maximum impact. Instead of relying on static targeting or manual testing, advertisers can now run campaigns that evolve dynamically based on performance data and user behavior.

Even the customer experience benefits from AI. Chatbots, conversational ads, and intelligent product recommendations create a more interactive and personalized journey—whether it’s through an ad on social media, a message bot embedded in an ad, or dynamic landing page content that adapts in real time.

In short, AI is used anywhere and everywhere in advertising and marketing and touches every stage of the process, making campaigns smarter, faster, and more effective across the board.

The best part? Both large, enterprise organizations and small businesses can harness the power of AI to increase their productivity and profit margins.

Key benefits of using AI in advertising

For marketers juggling shrinking budgets, tighter timelines, and growing pressure to prove ROI, the promise of AI can sound more like a buzzword than a practical solution.

But strip away the jargon, and there are real, measurable benefits emerging. AI isn’t magic, and it won’t replace human creativity. But it can make ad campaigns smarter, faster, and more efficient when used thoughtfully.

Let's take a look at some of the key advantages of AI and machine learning so you can decide if the benefits are worth the investment:

• Increased ROI and revenue - Companies using AI-driven advertising consistently see notable gains. According to a study by McKinsey, those who invest in AI are seeing a revenue uplift of 3 to 15 percent and a sales ROI uplift of 10 to 20 percent.
• Improved customer experience - 41% of respondents from PWC's recent survey said that enhanced customer experience was one of the main benefits of AI. Given that it can help deliver more relevant, timely, and personalized ads, power instant support through chatbots, and streamline cross-platform interactions, it's no surprise that modern marketers are taking advantage of it.
• Less time spent on repetitive tasks - In a recent survey by Drift, 20% of respondents said that they use AI to tackle around a quarter of their task list. A whopping 78% said that they believe AI will manage more than that in only 3 years.

The benefits lie in the foundation, but the real power of AI comes to life in how it’s applied. Let’s take a closer look at the practical ways businesses are using AI to transform their advertising strategies.

Use cases for AI in advertising

Beyond the hype, AI is already handling real tasks that used to eat up hours of manual work—and doing it faster, smarter, and often more effectively. Let’s explore the key ways it’s being used in real-world campaigns.

Ramping up creative production

Designing effective ad creatives is time-consuming, resource-heavy, and expensive.

Marketers are expected to constantly churn out fresh visuals that capture attention and convert, yet creative teams can get bogged down iterating endlessly on formats, and small businesses often don’t have the resources for dedicated designers at all.

Leveraging generative AI design tools can speed up the creative process by combining your marketing insights and its machine learning to generate high-performing creatives for you faster than you ever could with a design team.

Better still, some tools on the market can analyze millions of real ad examples and generate several variations of ads tailored to you (more on that soon).

Allocating and optimizing ad spend

Allocating and optimizing ad budgets is a high-stakes balancing act. Too much ad spend on underperforming campaigns wastes valuable resources, while slow adjustments can cause missed opportunities. Traditionally, marketers rely on historical data and manual checks—methods that are often reactive and inefficient.

AI-powered budget optimization transforms this process into a proactive, fine-tuned system. By analyzing real-time performance across campaigns, ad sets, and platforms, AI continuously reallocates spend to where it’s driving the strongest results. Whether CPC spikes, CTR drops, or conversion rates shift, AI adjusts budgets almost instantly, ensuring each dollar maximizes ROI without needing constant human oversight.

Engaging users with chatbots

Instead of simply displaying a message, conversational ads powered by chatbots invite users to engage—ask questions, explore products, and get personalized recommendations right from the ad itself. In fact, Meta has created its own tool called the Meta AI App, proving that these are more than just a passing fad.

While AI chatbots are great on their own, when integrated with your CRM or customer data, these bots can adapt the conversation based on who’s interacting. A returning customer might get a loyalty offer, while a new visitor sees curated product suggestions. This makes AI chatbots a smarter, more interactive way to connect—and convert—at scale.

Crafting high-converting ad copy

Crafting ad copy that actually converts can be one of the trickiest parts of running campaigns. Headlines need to be punchy, body text needs to be clear and persuasive, and every word counts.

AI tools streamline the copywriting process by generating headlines, descriptions, CTAs, and even full ad variations based on your brand tone, audience data, and performance insights. Some platforms use natural language processing (NLP) to suggest emotionally resonant phrases or predict which combinations are most likely to engage. This means that you can test multiple variations quickly, refine messaging based on results, and keep your ads fresh without starting from scratch every time.

These benefits show the potential, but where does AI really shine in practice? Let’s look at the most impactful use cases in real campaigns.

3 top examples of AI in advertising

AI is already powering some of the most effective advertising strategies in the world today. Let's take a look at how some of the pros are using artificial intelligence to create successful campaigns.

Coca-Cola

One of the most talked-about examples of AI in advertising came from an unexpected place: a holiday ad. In late 2023, Coca-Cola launched its first fully AI-generated Christmas campaign, blending nostalgic visuals with generative video tools like Runway and Luma to create thousands of unique ad variations at scale.

The campaign, dubbed “Create Real Magic,” invited users to co-create festive visuals using AI tools powered by OpenAI and Stable Diffusion. Coca-Cola’s internal creative teams then used those submissions as inspiration to generate short films and imagery that echoed the brand’s iconic holiday themes—polar bears, glowing trucks, and wintry cheer—but with a surreal, AI-spun twist.

For a brand as traditional and legacy-driven as Coca-Cola, it was a sign that AI is officially mainstream.

Mango

In July 2024, Spanish fashion giant Mango launched the Sunset Dream collection for its Teen line, marking the first time the brand created an entire AI marketing campaign. They captured real garment photos and then trained a model to intelligently "dress" digital models in editorial-quality imagery. The AI-generated images were reviewed, refined, and polished by Mango's in-house design and photography teams before being released across 95 markets.

While these ads still had a human touch, Mango’s campaign proves that AI doesn’t have to replace your team. It can help enhance creative workflows, reduce production time, and maintain high visual standards.

Kalshi

In a bold move during Game 3 of the 2025 NBA Finals, prediction-market platform Kalshi debuted a fully AI-generated commercial created with Google’s new Veo 3 text-to-video engine. The 30-second spot featured surreal, eye-popping imagery—such as an alien chugging beer, a man swimming in eggs, and an elderly cowboy carrying a Chihuahua—stitched together into a wild montage that perfectly mirrored the tagline: “The world’s gone mad, trade it.”

The ad was completed in just two days by a solo AI filmmaker, PJ Accetturo, who generated roughly 300–400 video clips and distilled them into 15 final shots—all for a total production cost of around $2,000. That’s a staggering cost reduction compared to traditional NBA Finals video ads, which typically require seven-figure budgets and months of studio work.

Top AI advertising tools

By now, it should be clear that AI is transforming how campaigns are created, personalized, and scaled. But what’s really powering these shifts behind the scenes?

In this section, we’ll discuss the AI marketing tools that make it possible, from copywriting engines and AI ad image generators to budget optimizers and predictive analytics platforms. Whether you're refining your creative, testing ad placement, or trying to prevent wasted ad spend, these are the tools modern marketers are turning to stay competitive, creative, and (most importantly) relevant.

Madgicx

At Madgicx, we’re not here to hype AI for the sake of sounding futuristic. We’re here to make your job easier, your ads better, and your budget go further. No buzzwords. No fluff. Just tools that work.

That's why our AI Ad Generator and AI Marketer have become a huge part of our customers' toolbox.

AI Ad Generator

Instead of staring at a blank canvas wondering what will stop the scroll, you can feed the AI Ad Generator a few inputs—like a product photo, an ad from the Ad Library, or a simple idea—and it spins up fresh, on-brand ad creatives in minutes. The built-in editor also lets you tweak images without creating a new design from scratch.

AI Marketer

The AI Marketer is like having a data-driven strategist on your team who never sleeps, never second-guesses, and never misses a performance dip. Every day, it scans your ad account across Meta platforms, identifies what’s working (and what’s quietly draining your budget), and delivers clear, actionable recommendations.

We're not talking vague suggestions like “try better creative”; we mean specific, data-backed insights, such as which ads to pause, what budgets to shift, or when to scale winning audiences. Best of all, you don’t have to dig through dashboards or juggle spreadsheets. The AI Marketer tells you what needs fixing, shows you why, and lets you apply the fix in just one click.

Want to see the AI Marketer and AI Ad Generator in action? You can test both—along with the rest of the Madgicx platform—free for 7 days. No stress, just smarter advertising from day one.

Start Your Free Trial and let the AI do the heavy lifting.

Jasper

Jasper is an AI writing assistant built to speed up and scale your ad copy creation without sacrificing quality or brand voice. Whether you're crafting Facebook headlines, Google descriptions, or short-form TikTok hooks, Jasper uses proven marketing frameworks and machine learning to generate high-performing copy variations in seconds.

It can adjust tone, optimize for different audiences, and even repurpose winning copy into new formats, making it especially useful when you're A/B testing creatives across channels. For ad teams juggling multiple campaigns, Jasper takes the heavy lifting out of brainstorming and helps keep your messaging sharp, consistent, and conversion-focused.

Unbounce

Getting someone to click your ad is only half the battle. What happens after that click is often what makes or breaks your ROI. While not an ad tool itself, Unbounce is a powerful AI-driven tool that helps you build high-converting landing pages designed to match your ad’s intent, message, and audience.

Unbounce’s Smart Traffic feature uses machine learning to automatically route each visitor to the landing page variant most likely to convert based on their behavior and attributes. Combine that with Smart Copy, which generates persuasive, on-brand headlines and page content, and you’ve got a tool that closes the gap between ad spend and actual results. Whether you're driving traffic from Meta, Google, or any other platform, Unbounce helps ensure your landing experience isn’t the weak link in your funnel.

Conclusion

Whether it’s helping refine your targeting, automating budget adjustments, or generating high-quality creatives on the fly, AI is reshaping what’s possible in digital advertising.

Throughout this article, we’ve explored how brands like Coca-Cola, Mango, and Kalshi are already using AI to push creative boundaries and streamline production. We also looked at how tools Madgicx’s AI Marketer and AI Ad Generator help advertisers make smarter decisions and move faster without sacrificing quality.

The key takeaway is this: you don’t need to reinvent your entire process to benefit from AI. You just need to equip your team with the right tools. By automating repetitive tasks and leveraging intelligent insights, AI gives marketers more time to focus on strategy, creativity, and performance.

Start small, experiment, and build from there. In a fast-moving landscape, the teams that learn to work alongside AI will be the ones who stay ahead.