International Journal of Information Management xxx (xxxx) xxx

Contents lists available at ScienceDirect

International Journal of Information Management

journal homepage: www.elsevier.com/locate/ijinfomgt

Opinion Paper

AI-powered marketing: What, where, and how?☆

V. Kumar a, b, *, 1, Abdul R. Ashraf a, 1, Waqar Nadeem a, 1
a
Goodman School of Business, Brock University, Canada
b
Chang Jiang Scholar, HUST, China; and Distinguished Fellow, WE School, India

A R T I C L E I N F O A B S T R A C T

Keywords: Artificial intelligence (AI) has become a disruptive force that has revolutionized industries and changed business
AI marketing practices. The integration of AI has brought numerous benefits to various functional areas within organizations,
Marketing strategies with marketing experiencing a significant positive impact. AI technologies have empowered marketers with
Marketing activities
advanced tools and insights, fostering unparalleled efficiency, personalization, and strategic campaign decision-
Consumer behavior and decision making
making. Despite these advancements, the scholarly focus on AI’s transformative effects on marketing is limited.
Research agenda
This research investigates how AI is currently applied across different marketing functions and its potential
future evolution and impact on marketing processes. In a rapidly evolving world, businesses must navigate
complexity, innovate, and sustain competitive advantages. Grounding our analysis in previous AI marketing
literature, we adopt the dynamic capability theoretical lens, emphasizing how organizations adapt and prosper in
changing environments. This study highlights six key marketing areas where AI promises transformative effects,
aiming to illuminate the path for future marketing innovations and strategies, including AI-driven customer
insights, measuring marketing performance, automated marketing strategies, ethical implications, enhancing
customer experiences, and growth opportunities with AI Implementation. While recognizing AI as a positive
disruptive force, we also highlight its limitations, potential threats to privacy and security, as well as ramifi­
cations of biases, misuse, and dissemination of misinformation. Finally, the article delineates the gaps in the
research and formulates questions aimed at advancing knowledge in AI marketing.

1. Introduction travel recommendations, ticket booking, and landmarks recommenda­

tions. The growth of AI and its prospects for the marketing industry are
AI is on the verge of making our lives more productive and creative. immense (Kumar, 2021). In this regard, integrating AI into our daily
lives is no longer a question of “if” but rather a matter of “when.”
—Bill Gates, Microsoft founder Even though AI is propelling the productivity frontier for economies
and businesses across various industries, marketing is undoubtedly one
Artificial intelligence (AI) has gained widespread recognition as a
area with the most to gain from AI (Davenport et al., 2020; Huang &
disruptive force that can revolutionize entire industries and bring about
Rust, 2021). In an analysis encompassing over 400 AI use cases spanning
significant changes in business practices (Noble & Mende, 2023). Just a
19 different industries and nine business functions, global management
few years ago, AI was about robots or futuristic movies, yet here we are,
consulting firm McKinsey & Company determined that AI’s most sig­
standing on the verge of this imminent reality. Currently, AI solutions
nificant potential value is primarily associated with domains related to
are dominant in many user-facing interactions. For instance, AI-powered
marketing and sales (Chui et al., 2018). Similarly, in 2022, a compre­
chatbots influence the online shopping experience by personalizing the
hensive global survey conducted by Salesforce Research revealed that
experience based on the customer’s previous shopping data. Everyday
the utilization of AI among marketing professionals has significantly
uses of AI include automated customer support for customer queries and
increased compared to the previous year. The survey indicated that 87%
requests, and travel assistance wherein chatbots provide users with
of marketing professionals employed AI to bridge the gap between

☆
We thank the Editor, the Guest Editors and the anonymous reviewers for their valuable feedback, and guidance during the revision of this manuscript. We thank
Renu for copyediting the manuscript. We thank Bharath Rajan for his valuable feedback.
* Correspondence to: Goodman School of Business, Brock University, ON, Canada.
E-mail addresses: [email protected], [email protected] (V. Kumar).
1
All Authors contributed equally.

https://doi.org/10.1016/j.ijinfomgt.2024.102783
Received 7 December 2023; Received in revised form 20 March 2024; Accepted 25 March 2024
0268-4012/© 2024 The Author(s). Published by Elsevier Ltd. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).

Please cite this article as: V. Kumar et al., International Journal of Information Management, https://doi.org/10.1016/j.ijinfomgt.2024.102783
V. Kumar et al. International Journal of Information Management xxx (xxxx) xxx

online and offline experiences, a notable increase from 71% in 2021. likely replace many jobs. Similarly, companies may experience negative
Additionally, 87% of marketing professionals utilized AI to effectively consequences as customers may not be receptive to or feel at ease
resolve customer identity, showcasing a rise from 82% in 2021. More­ knowing they are interacting with a bot.
over, the survey highlighted that 88% of marketing professionals har­ The above three examples demonstrate that AI has moved beyond
nessed the power of AI to automate various processes, including being a concept of the future; it has become an integral part of our daily
reporting, surpassing the 83% recorded in 2021 (Salesforce, 2023). lives. Both academics and industry professionals have high expectations
These findings demonstrate the growing reliance on AI within the for the impact of AI on marketing strategies and customer behaviors. In
marketing industry to enhance customer experiences, streamline oper­ practice, many marketing functions have implemented AI applications,
ations, and drive efficiency. While such industry reports adequately such as chatbots for enhanced customer experience, predictive analytics
demonstrate the growing importance of AI in marketing, the trans­ for lead scoring, churn prediction, and campaign optimization, recom­
formative power of AI in the marketing discipline can be best understood mendation engines for personalized content and product recommenda­
using three illustrative cases from various marketing activities. tions, content creation for social media posts and email campaigns,
First, AI is transforming customer service in various industries. For natural language processing for customer sentiment and feedback
example, Amazon Prime Air’s AI-powered delivery system is a remark­ analysis, and programmatic advertising for buying and optimizing dig­
able application of AI that will revolutionize how we experience delivery ital advertising space in real-time, among others (Kumar, 2021).
services. Prime Air aims to deliver packages within 30 min of placing the On the academic side, we observe AI research’s proliferation in
order. The AI system powering Prime Air constantly learns and im­ marketing. For example, the impact of AI-powered robots on frontline
proves, enabling drones to navigate diverse surroundings better, adapt employees and consumers’ shopping behaviors (Bonetti et al., 2023;
to changing weather conditions, and find the most efficient flight paths. Holthöwer & van Doorn, 2023; Maragno et al., 2023; Mende et al.,
This continuous learning ensures that Prime Air evolves and becomes 2023); psychological and cultural barriers to the adoption of AI shop­
more dependable, delivering packages with unparalleled speed and ping systems (de Bellis & Venkataramani Johar, 2020; De Bruyn et al.,
precision. The AI-powered Prime Air delivery initiative could transform 2020); ethical concerns in implementing autonomous shopping systems
consumers’ shopping behaviors and business models as it offers several (Hermann, 2022; Kim et al., 2023); influence of AI chatbots on in-store
benefits, such as speed and cost-effectiveness. and online customer experience, customer service (Grewal et al., 2020;
Second, the traditional online retail business model follows the Puntoni et al., 2021; Zierau et al., 2023), and investor sentiment
shopping-then-shipping model, in which customers place orders before (Fotheringham & Wiles, 2023; Rust & Huang, 2021); application of
an online retailer ships the products (Davenport et al., 2020). However, different machine learning techniques, such as text, voice, and emotion
Stitch Fix, a multi-brand e-tailer specializing in fashion, and Amazon, analyses (Guha et al., 2023; Han et al., 2023) and dynamic online
with its anticipatory shipping model, have flipped the sequence. By pricing (Misra et al., 2019); and leveraging extensive data to optimize
harnessing AI’s ability to leverage extensive data, online retailers can online consumer profiles and searches (Duan et al., 2019; Haleem et al.,
make remarkably precise predictions about consumer preferences. This 2022; Vaid et al., 2023).
capability paves the way for retailers to shift seamlessly toward a While the application of AI in marketing is gaining popularity in
shipping-then-shopping business model (Grandinetti, 2020). For practice, it is not surprising, given its relative newness and complexity,
example, Stitch Fix employs an in-house AI system that leverages a that its role across different marketing functions seems to be under-
combination of customer style, size, price preferences, and investigated—although not completely overlooked (Ameen et al., 2022;
non-numerical data (e.g., images) and incorporates insights from other De Bruyn et al., 2020; Huang & Rust, 2022a). This prompted the current
customers who share similar preferences to curate a collection of five research to examine the extent to which AI is used across various mar­
articles for each Fix shipment. Customers can keep the items they want keting functions (i.e., what and where) and how it will likely evolve and
and return the ones they do not wish to keep. This shift will enable impact future marketing strategies and customer behaviors. Our
customers to delegate their buying decisions to the AI application, which research is grounded in the dynamic capability theory (Hunt & Mad­
primarily makes decisions based on the customer’s previous purchases. havaram, 2020; Kumar et al., 2019; Leemann & Kanbach, 2022; Mata­
Consequently, in the age of AI, marketing strategies and business models razzo et al., 2021; Teece, 2020; Weaven et al., 2021). By integrating this
are evolving from being “reactive” to more “predictive.” Although it is theory, we align our investigation with a significant theoretical
too early to draw any firm conclusions, one important takeaway is that perspective and address the growing demand for a deeper comprehen­
AI is a powerful tool for tailoring content, services, and recommenda­ sion of how artificial intelligence (AI) influences marketing practices.
tions to individual preferences, ultimately enhancing customer satis­ This approach responds directly to calls for in-depth research into the
faction and nurturing long-term loyalty. interplay between AI and marketing, as highlighted by Huang and Rust
Third, marketing core activities involve understanding customer (2022a) (2022b) and Mishra et al. (2022). Our study endeavors to reveal
needs, aligning them with the firms’ offerings, and convincing in­ AI’s capacity to transform marketing strategies and operations,
dividuals to purchase. Traditionally, these activities are spread across emphasizing the critical role of dynamic capabilities in navigating the
different functions (namely, marketing, sales, and service), primarily evolving landscape of technology-driven marketing.
operating independently. AI can augment a firm’s capabilities by facil­ Building on this theoretical foundation, we conducted a thorough
itating a triple emphasis on marketing, service, and sales, leading to literature review on AI’s role in marketing (see Table 1), complemented
exceptional conversion rates. For example, RedBalloon, an Australian by insights from 40 marketing professionals in middle to senior man­
online retailer, utilizes “Albert,” an AI-driven digital platform. Albert agement roles. This dual approach helped us identify six key marketing
leverages internal and cross-channel data, customizes creative assets, themes that are essential for understanding AI’s transformative effect on
and buys and manages media space on media channels (i.e., program­ the marketing landscape. These themes, detailed in Fig. 1, underscore
matic advertising), including YouTube, Facebook, and Google. It learns AI’s potential to revolutionize marketing through enhanced personal­
and continuously focuses on building a nurturing rather than a trans­ ized customer insights, automation of marketing strategies, and more
actional relationship. All RedBalloon customers get a personalized efficient operations. Our findings not only summarize the current state
experience—thanks to predictive analytics—and the strategically timed of AI in marketing but also chart a course for future research and de­
questions (i.e., chatbots) help further optimize an engaging experience, velopments in this rapidly evolving area, illustrating the broad and
leading to higher conversion rates. Given the real-time nature of digital impactful possibilities for AI’s integration into marketing practices.
and direct marketing, such automation significantly assists marketers in
effectively managing labor-intensive, high-time-pressure processes.
However, the risk has been heightened for employees as automation will

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Table 1 example of a tool to generate content and ideas for almost 50% of
Recent select studies on AI in marketing. marketers in the industry (Rodrigue, 2023).
Authors and Journal Conceptual framework Adidas and Netflix exemplify the broad applications of AI in the
year published business realm. Both companies use AI to analyze vast amounts of
Kumar et al. California Conceptualizes personalized consumer data to identify patterns, trends, and insights that can inform
(2019) Management Review engagement marketing as an marketing strategies and campaigns (Mathur, 2023; Prentice et al.,
approach to creating, 2020). To improve its marketing budget, Accenture uses AI to optimize
communicating, and delivering data collection, reducing the data flow process time by 80% (Mishra
personalized offerings to customers
using AI.
et al., 2022). This has helped the company cut the insight lag from 5
Huang and Rust Journal of the Conceptualizes cyclical methodology months to 5 weeks, enabling Accenture to gain an additional $300
(2021) Academy of Marketing for strategic marketing planning by million in sales without increasing media spending (Accenture, 2024).
Science incorporating multiple AI benefits. Moreover, AI finds intriguing applications in observing customer
Whittaker et al. Australasian Conceptualizes a framework for
behavior and habits even after the purchase. In this regard, P&G
(2021) Marketing Journal deepfake in the marketing literature.
Mogaji and International Journal Conceptualizes a framework for implemented intelligent faucets in the residences of willing participants
Nguyen of Bank Marketing adopting AI for financial services to monitor product utilization (Cretella, 2022). The provided insights
(2022) marketing. revealed actual water-saving benefits of dishwashers, despite the
Perez-Vega et al. Journal of Business Conceptualizes online customer misconception that these machines are energy-consuming. Following
(2021) Research engagement behavior based on the
stimuli-organism-response (S-O-R)
these insights, the marketing team launched the “Do It Every Night”
theory. campaign, helping to increase the knowledge (Business Wire, 2020). The
Huang and Rust Journal of Retailing Conceptualizes “collaborative campaign led to an increase in weekly dishwasher usage, promoting
(2022a) intelligence in marketing,” both sustainability and business growth.
emphasizing the cooperative
Overall, the advancement in AI technologies and capabilities has
relationship between AI and human
intelligence. fundamentally changed how marketers connect with customers, un­
Chen et al. Journal of Business & Conceptualizes a framework for AI derstand their requirements, and offer value (Kumar et al., 2019; Kumar,
(2022) Industrial Marketing adoption in business-to-business 2021). It serves as a ladder between technology and marketing to pro­
marketing. mote innovation, improve consumer experiences, and achieve superior
Ngai and Wu Journal of Business Conceptualizes a framework for
marketing results (Huang & Rust, 2021). Although AI’s rapid evolution
(2022) Research machine learning application in
marketing. involves ethical concerns such as data privacy, algorithmic bias, and
Plangger et al. Journal of the Conceptualizes a framework for the misleading predictions, strong guidelines and regulations can alleviate
(2022) Academy of Marketing conversion of strategic resources into the challenges (Elliott & Soifer, 2022; Manyika et al., 2019). Integrating
Science value for customers, companies, and
AI into marketing techniques can be regarded as a symbol of transition
society.
Ameen et al. Psychology & Conceptualizes a framework toward data-driven and consumer-centric methods and offers a future in
(2022) Marketing regarding the antecedents, which marketing is more responsive, adaptive, and effective.
dimensions, and outcomes of
creativity in marketing and AI. 2.2. Early adoption of AI in marketing
Mariani et al. Technovation Conceptualizes a framework on the
(2023) drivers and outcomes of AI adoption
for innovation. Initiated in the 1940 s and influenced by Alan Turing’s code-
breaking device and Isaac Asimov’s robotics laws, the historical trajec­
tory of AI has gone through several seasons, each with its developments
2. Role of AI-powered marketing and challenges (Haenlein & Kaplan, 2019). However, until the early
2000 s, the notion of AI in marketing was still in its early stages when
2.1. Overview of AI in the marketing field corporations began researching data mining techniques to better un­
derstand customer behavior and preferences (Aflalo, 2020). Customer
Artificial intelligence (AI), characterized by powerful algorithms and segmentation, targeting, and positioning were the primary goals of early
machine learning capabilities, has revolutionized marketing (Noble & applications. Email marketing systems began to use AI to improve
Mende, 2023). Haleem et al. (2022) define AI as a technology that al­ sending times and email content, leading to increased open rates and
lows computers to simulate and comprehend human interaction and engagement. With the rise of search engines such as Google, the use of AI
behavior, whereas Haenlein and Kaplan (2019) define it as a ’system’ has become critical in building algorithms for search engine optimiza­
that can analyze external data, gain insight from it, and then employ tion (SEO) and pay-per-click (PPC) advertising (Danao & Main, 2022).
what it has learned to achieve specific objectives and tasks through Marketers began to optimize keywords, bids, and ad optimization, hence
flexible adaptation. Mustak et al. (2021) also consider AI as an umbrella increasing visibility and click-through rates (Schwartz, 2022). This was
that spans numerous activities and concepts under the wide-ranging also the era of programmatic advertising, which enabled automated,
belief that various computer systems, through the application of soft­ real-time auction ad buying while targeting users with greater accuracy
ware and algorithms, can support or undertake tasks that once deman­ and at scale (Das, 2023).
ded human cognitive skills. In the late 2000 s, the growth of social media platforms such as
AI in marketing is synonymous with precision, personalization, and Facebook and Twitter opened new avenues for AI. Marketers have
efficiency (Huang & Rust, 2022a; Yu et al., 2019). It empowers mar­ slowly begun to use AI-powered tools for brand monitoring, sentiment
keters to customize their efforts to match consumers’ requirements and analysis, and social media management and analytics (Kaput, 2022).
preferences, thus promoting more meaningful and productive in­ Firms employed these tactics to gain insight into customer sentiments
teractions (Tiautrakul & Jindakul, 2019). AI’s eponymous intelligence and trends to design more personalized and adaptable marketing cam­
originates from its ability to self-learn and continuously improve itself, paigns. With the surge of Big Data in the 2010 s, AI-powered predictive
increasing its productivity and efficacy with each task iteration (Verma algorithms were able to forecast future behaviors and trends by
et al., 2021). It can automate routine and non-routine operations by analyzing customer behavior, purchase history, and interactions
simulating human thinking and actions, evaluating complicated data to (Simpson, 2020).
uncover behavioral patterns and insights, and learning from experiences In the 2010 s, the introduction of chatbots and virtual assistants such
to make intelligent decisions (Huang & Rust, 2018). Generative AI is an as Siri and Alexa was a turning point in AI-driven marketing (Kaplan &

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Fig. 1. Marketing areas where AI can bring about transformative effects.

Haenlein, 2019; Verma et al., 2021). These AI-powered tools made im­ provides a selected list of AI applications and the companies operating in
mediate, personalized interactions with shoppers possible. In the late this space. Technologies, such as predictive analytics, have been
2010 s, advances in machine learning and deep learning facilitated more essential in forecasting customer behavior, allowing marketers to
complex and autonomous AI applications in marketing. The processing develop strategies that are not only responsive but also proactive
and analysis of unstructured data, such as text and photos, enabled (Haleem et al., 2022). Programmatic advertising, powered by AI, has
improved content and visual recognition (Qin & Jiang, 2019). enabled marketers to navigate the fragmented digital advertising land­
As we move through the 2020 s, the use of AI in marketing has scape, automating ad buying processes and optimizing ad placements in
advanced from simply a technological aid to a key engine of cutting- real time, ensuring that ads reach the right audience at the right time
edge tactics. Now, more AI-powered marketing applications that have (Ford et al., 2023). Combining AI with cutting-edge technologies, such
been developed for specific uses are being used by companies. Table 2 as metaverse, augmented reality, and blockchain, is anticipated to open
new possibilities and boundaries in digital marketing (Noble & Mende,
2023). Marketers face both a challenge and an opportunity in harnessing
Table 2
these technologies to develop innovative, personalized, and ethically
Select AI applications in marketing.
responsible marketing strategies that resonate with the increase.
Selected AI Applications Key Players

Data Science Platforms SAS, IBM Watson, Rapidminer, Anaconda

2.3. Theoretical frameworks underpinning AI in marketing
Data Generation & Hive, Upwork, Amazon M-Turk, Unity
Labelling
Machine Learning Fiddler, Arize, Neural Magic, Evidently AI The convergence of AI and marketing signals a transformative era in
Operations (MLOPS) the modern business landscape, redefining conventional concepts of
Computer Vision Amazon SageMaker, Matroid, clarifai customer engagement, data analytics, and strategic decision-making
Speech Siri, Alexa, Cortana, PolyAI
Natural Language Google Cloud Natural Language AI, Hugging Face,
(Laker, 2023). With its substantial impact on redefining marketing, AI
Processing (NLP) Amazon Translate has drawn attention for its ability to transform marketing practices and
Edge AI Hailo, Deeplite, Edge Impulse consumer engagement in a progressively digital realm. As it becomes a
Horizontal AI/AGI Google Research, Microsoft Research, Meta Research, sophisticated staple in marketing activities, AI demands a rethinking of
OpenAI, stability.ai, Midjourney
practical strategies and a refinement of the theoretical frameworks in
AI Hardware Google Cloud, Nvidia, Intel, Graphcore, Cerebras
Closed Source Models OpenAI (ChatGPT), OpenAI (DALLE2), OpenAI (GPT- marketing literature (Kaplan & Haenlein, 2019). This section aims to
4), DeepMind, Midjourney, Google Bard, Google create a theoretically solid foundation for future research and practice
LaMDA by providing a concise overview of AI’s theoretical underpinnings and
Source: Insights Compass 2023 - Unleashing Artificial Intelligence’s true po­ real-world applications in marketing. Despite the vast literature on AI in
tential. In Statista. Retrieved September 04, 2023, from https://www.statista.co marketing, which spans various topics and technologies, we briefly dive
m/download/MTY5Mzc0Njk0MiMjMjIwMjY0OCMjMTM4OTcxIyMxIyNud into some prominent conceptual frameworks in this domain.
WxsIyNTdHVkeQ= =. One theory that carefully outlines AI’s role in marketing is presented

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by Huang and Rust (2021), which integrates a three-stage strategic of AI adoption for innovation (Mariani et al., 2023), a framework of
planning framework inspired by Deming’s (1986) plan-do-check-act adopting AI for financial services marketing (Mogaji & Nguyen, 2022),
cycle. This approach offers a cyclical methodology for strategic mar­ and a framework regarding the antecedents, dimensions, and outcomes
keting planning, starting with detailed marketing research, developing of creativity in marketing and AI (Ameen et al., 2022). These frame­
segmentation, targeting, and positioning strategies, and executing spe­ works serve as road maps for AI-powered marketing in different domains
cific marketing actions, which then inform future marketing research, prevalent in the current era. However, our focus remains on the most
creating a continuous cycle. Huang and Rust (2021) underscore AI’s recent and relevant AI issues critical for improvements in the marketing
vital role across all three strategic marketing stages, pointing out various area, which we will discuss in the following section.
AI intelligences: mechanical, thinking, and feeling, each mimicking
particular human abilities and applied across different tasks (Huang & 2.4. AI-driven marketing capabilities
Rust, 2018; Huang et al., 2019). Mechanical AI focuses on automating
routine tasks, thinking AI processes unstructured data to make decisions, Implementing AI has demonstrated a significant enhancement in
and feeling AI is designed to interact with humans and/or analyze firms’ capabilities across various industries (Kumar et al., 2019). Dy­
human emotions. namic capabilities theory has long been the fundamental basis of firms
In another study, Huang and Rust (2022a) introduce “collaborative seeking sustainable competitive advantage (Teece et al., 1997). Orga­
intelligence in marketing,” emphasizing the cooperative relationship nizations with dynamic capabilities can quickly innovate, modify, and
between AI and human intelligence (HI). The framework includes reorganize their business plans and procedures in response to emerging
marketer and consumer intelligence in performing marketing and con­ technology, altering consumer demands, and changing market condi­
sumption tasks. It outlines three general principles (GP) to explain how tions. In this era, AI has emerged as a pivotal dynamic capability,
collaborative intelligence can be achieved in marketing at various in­ embodying the transformative power of technology in business strategy
telligence levels. GP1 highlights the unique strengths of AI and HI, GP2 (Agarwal et al., 2021).
suggests that lower-level AI should enhance higher-level HI, and GP3 AI-driven capabilities refer to the skills, functionalities, and strengths
proposes a progression whereby AI first supports and then replaces HI at that are enabled or greatly empowered by AI across a range of domains
each intelligence level, promoting collaboration to move to a higher (Sjödin et al., 2021; Agarwal et al., 2021). These capabilities extend
intelligence level when AI can autonomously perform all lower-level beyond traditional firm capabilities and resources, leveraging data
intelligence tasks. analysis, automation, decision-making, and adaptive innovation to
A compelling study by Plangger et al. (2022) highlights the trans­ amplify responsiveness to market changes (Mariani et al., 2022; Mikalef
formative impact of emerging digital technologies in formulating stra­ & Gupta, 2021; Teece, 2019; Vlačić et al., 2021). For example, AI-driven
tegic marketing and generating value for customers, firms, and society. capabilities integrate advanced algorithms for predictive analytics,
The researchers introduce a framework that emphasizes employing automate tasks, and tailor messages to individual consumer profiles
strategic resources, including financial, human, technological, and (Shovo, 2021). This fosters a nuanced understanding of customer needs,
customer data, to develop and implement relevant digital technologies leading to more efficient and impactful marketing efforts (Ameen et al.,
such as Metaverse, Robotics, IoT, and virtual assistants. This approach 2021). Hence, AI-driven capabilities are not just an upgrade to existing
achieves strategic outcomes benefiting customers, firms, and society. methods but a transformative approach that redefines the landscape of
They further categorize strategic outcomes into customer value (i.e., modern marketing.
satisfaction, repurchase intention, acquisition, and word of mouth), Building on past AI marketing research (e.g., Kumar et al., 2019), we
brand value (i.e., sales performance, competitive advantage, market delineate AI-driven marketing capabilities into three main categories:
share, and brand reputation), and societal value (i.e., ecological regen­ analytical marketing capabilities, technological marketing capabilities, and
eration, stakeholder stewardship, and governance leadership). This strategic efficiency capabilities. Analytical marketing capabilities refer to the
study also introduces AI as a boundary condition that mitigates the in­ ability to use AI for deep analysis of large and complex datasets (Adi
vestments of strategic resources in the aforementioned emerging et al., 2020). This capability involves extracting insights from customer
technologies. data, market trends, and consumer behavior (Kaplan & Haenlein, 2019),
Perez-Vega et al. (2021) conceptualize online customer engagement enabling firms to examine the effectiveness of their performances in the
behavior, providing a conceptual framework based on the stimuli- form of marketing campaigns or ad placements (Campbell et al., 2020).
organism-response (S-O-R) framework, aiming to explore integrating Technological marketing capabilities focus on the integration and appli­
customer interaction with AI in marketing. The concept defines stimuli cation of AI technologies to enhance brand offerings (Mariani et al.,
as solicited and unsolicited manifestations of online customer engage­ 2022). It includes the incorporation of AI tools and platforms to auto­
ment behaviors that drive the AI organism process, resulting in AI and mate marketing processes and create intelligent marketing content, all
human responses. The stimuli are processed by AI organisms, which can while ensuring adherence to ethical guidelines. Lastly, strategic efficiency
deliver real-time insights and action suggestions. For more compre­ capabilities encompass more than just improvements in efficiency; they
hensive real-time customer insights, the AI organisms combine live and include initiatives aimed at increasing the agility and responsiveness of
stored data using various data processing methods, including content- marketing operations to adapt to changing market dynamics and shifts
based, collaborative, and hybrid methods. Real-time customer data are in consumer preferences, such as engagement with emerging realities
used to inform the responses, which can be manual or automated like the metaverse and spatial computing. These capabilities provide
company responses. Sentiment and category analysis can produce more enduring benefits and are instrumental in significantly enhancing the
comprehensive results on future online customer engagement behavior. customer experience (Mikalef & Gupta, 2021). In the following sections,
This framework aims to pave the way for further research into the uses we delve deeper into the three AI-driven marketing capabilities.
and implications of AI in enhancing and developing customer and
company interactions in a marketing context. 2.5. Marketing themes and AI-driven capabilities
Other prominent frameworks in this domain include a framework for
understanding the role of AI in personalized engagement marketing and Following a comprehensive examination of current trends, a survey
offering predictions on two key strategic firm assets—brands and cus­ with 40 marketing professionals at middle to senior levels, and an
tomers—across developed and developing economies (Kumar et al., extensive literature review (see Table 1), this paper has identified six
2019), a framework for AI adoption in business-to-business marketing marketing themes that are explored under each capability presented in
(Chen et al., 2022), a framework for machine learning application in the previous section. These themes offer a pivotal understanding of the
marketing (Ngai & Wu, 2022), a framework of the drivers and outcomes transformative impact of AI on the marketing landscape (Fig. 1). The

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organization of these themes reflects their relevance to each discussed navigate through the customer’s journey strategically. AI redefines
capability and has been drawn upon a broad range of studies that have customer relationship paradigms by anticipating consumer demands,
investigated AI’s contribution to marketing. For instance, Al Mubarak tailoring interactions, and optimizing customer journeys through pre­
and Hamdan (2023) contribute to our understanding of the depth and dictive analytics. For example, AI analyses of customer retail checkout
breadth of AI’s role in marketing. Haleem et al. (2022) outline the sig­ data help marketers gain insights about consumer needs and prefer­
nificant applications of AI in marketing, while Anayat and Rasool (2024) ences, leading to increased satisfaction and purchase likelihood through
analyze keyword co-occurrence and co-citation to delineate principal real-time personalized communication (van Esch et al., 2021).
topics and research areas in AI for marketing. Additionally, Verma et al. Moreover, AI-powered customer relationship management (CRM)
(2021) conducted an extensive literature review, providing organization systems can evaluate historical purchase data to predict future pur­
to the existing body of work on AI’s role in marketing. chasing behaviors, allowing firms to develop focused marketing cam­
To complement our literature review, we surveyed to determine the paigns that increase client loyalty and revenue (Chatterjee et al., 2019).
practical importance of AI in the six identified marketing themes further. The enhanced personalization and predictive capability create a more
Therefore, we administered an online survey to 40 marketing pro­ engaged and loyal customer base, as consumers often respond positively
fessionals (middle to senior management positions) in companies to brands that understand their needs and preferences (Arora et al.,
currently implementing or considering the integration of AI in their 2021). This paper’s introductory theme focuses on AI-driven customer
marketing, sales, or advertising activities. The survey reveals that the insights, a critical component of analytical marketing capabilities.
“Ethical Implications” of AI in marketing emerged as the most signifi­ Specifically, it focuses on two key aspects, namely (a) predictive ana­
cant theme. Its rating and ranking scores surpass those of the other lytics emerging from AI-enhanced CRM and (b) algorithmic personali­
themes, highlighting the critical importance of ethical considerations in zation and segmentation of customers. We go deep into the application
AI applications. The results of this survey are discussed in more detail in of these elements, exploring their advantages and disadvantages, and
the following sections. subsequently illuminate the discussion with pertinent examples.
In the curation of these themes, meticulous attention was paid to Predictive analytics (CRM).
ensure distinctness and minimal overlap among them. We intended to AI-powered CRM systems help firms identify potential consumers
isolate themes that were most salient and impactful within the mar­ and strengthen relationships with existing ones (Taryn, 2023). These
keting domain, specifically those that underscored the transformative platforms aim to generate leads, convert potential customers into actual
role of AI. Initially, nine themes were identified, and upon recognizing buyers, and maintain engagement with the existing customer base
overlaps, this was refined to six distinct themes. However, it is across various channels. To achieve these objectives, marketers under­
acknowledged that this thematic exploration is not exhaustive. The take specific initiatives and operations, which are now more streamlined
dynamic nature of AI and its growing influence in marketing suggest than ever with the help of AI. Predictive algorithms facilitate campaign
numerous other potential themes that can be explored in future management, data analysis and reporting, email management, lead
research. scoring, customer categorization, and conversation and sentiment
To provide deeper insights into AI’s role in marketing, we system­ analysis (Fotheringham & Wiles, 2023; Guha et al., 2023; Han et al.,
atically explored each AI-driven marketing capability (analytical, tech­ 2023). For campaign management, generative AI suggests headlines and
nological, and strategic efficiency) through two corresponding themes. adjusts the tone of communications, while AI ad management selects the
These themes highlight critical aspects of each capability and present a optimal demographics and the most effective platform for outreach
comprehensive understanding of the potentials and challenges of AI’s (Simonsen, 2022). Meanwhile, natural language processing (NLP) al­
role in marketing. Furthermore, the themes present crucial consider­ gorithms offer insights into customer sentiments during conversations
ations for managers, highlighting critical areas of focus during and after and predict the best approach for further interactions (Ma et al., 2018).
the integration of AI in marketing strategies. They underscore the The predictive analytics assess user interactions with email content,
challenges that managers should anticipate through the ongoing use of enable better predictions on send times and content customization, and
AI in their marketing operations. This structured thematic approach prioritize customer support based on the content (Ashbridge, 2023). Call
equips practitioners with valuable insights for effectively integrating AI tracking AI platforms such as Talkdesk can unlock stories behind con­
into their marketing practices while confronting its complexities and versations. Talkdesk extracts valuable insights from call recordings, re­
optimizing its benefits. fines the data, and integrates it to create a comprehensive customer
profile, allowing for the delivery of high-quality customer service. This
2.5.1. Analytical marketing capabilities multidimensional use of AI in the digital activities of CRMs not only
Analytical marketing capabilities offer AI-based analytics centered optimizes business processes but also significantly improves customer
on customer data. This capability is studied through two themes: AI- relationship and interaction management (Buchanan, 2023).
driven customer insights and measuring marketing performance. AI- Moreover, AI insights pinpoint prospects with a high likelihood of
driven customer insights focus on using AI to streamline customer conversion and recommend subsequent actions based on historical
relationship management via data insights and predictive analytics, as performance (Noble & Mende, 2023). Marketing strategies can be
well as implementing algorithmic personalization and customer seg­ adjusted to target high-potential prospects more effectively based on
mentation (Mariani et al., 2022; Huang & Rust, 2021). This approach their preferences and behaviors (Harvard Business Review, 2023).
enhances the effectiveness and relevance of marketing strategies by Automated reminders can also be set for the sales team to follow up at
deeply understanding customer data and preferences. In the case of optimal times, ensuring no missed opportunity. Einstein AI is an
measuring marketing performance, the emphasis shifts toward example in this regard, which identifies prospects with a high likelihood
leveraging AI in two significant ways: the application of AI-powered of conversion based on historical interactions and performance metrics.
analytics tools for executing marketing initiatives and the employment For instance, Einstein might advise a targeted follow-up email or send a
of real-time performance tracking to enable agile, data-informed deci­ limited-time offer if a prospect frequently interacts with email cam­
sion-making (Rosário & Dias, 2023). paigns but has not purchased it yet. Such processes are not limited to the
B2C context and can be implemented in B2B marketing (Kim & Kumar,
2.5.1.1. Theme 1: AI-driven customer insights. Diving into consumer 2018), where the sales cycles are typically longer and more complex. In
behavior, analytical marketing capabilities harness the power of AI to these environments, AI-powered CRM systems are invaluable for
meticulously analyze patterns and predict future actions (Fan et al., nurturing leads through prolonged decision-making processes. They
2023; Lalicic & Weismayer, 2021). These predictions allow marketers to offer tailored content delivery and automated follow-ups based on in­
dividual lead behavior and preferences, enhancing the chances of

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conversion. how to teach, and it predicts the learner’s current issues, allowing
Apart from digital marketing activities, AI’s capacity to detect pat­ teachers to address the problem right away (Loeffler, 2018). Similarly,
terns in client sales data enables it to deliver more accurate sales pro­ Georgia State University introduced an AI chatbot, Pounce, that reduced
jections and allows organizations to strategically plan and enhance their “summer melt” (i.e., students enrolled in spring dropping out of college
sales operations (e.g., Rohaan et al., 2022; Sohrabpour et al., 2021). in fall) by 22%. Using conversational AI technology, the chatbot was
IBM’s use of its AI platform, Watson, in its CRM systems is an industry able to guide students in getting their queries answered in a timely and
example (IBM (n.d.)). IBM Watson helps organizations find patterns and relevant manner, thereby helping them stay in college (Ravipati, 2017).
correlations between various factors that could affect sales, including Customization and tailored products can have varying goals across
seasonal changes, promotional activities, and shifts in customer prefer­ different industries. While the financial industry aims to offer services
ences. Watson can give merchants more precise sales projections, tailored to diverse financial needs, the music industry focuses on emo­
empowering them to make wise choices about their inventory, mar­ tions and interests. Spotify is a famous example of perfectly performing
keting plans, and customer interaction. This predictive capability helps segmentation and personalization. “Hyper-personalization” in Spotify
retailers optimize their operations, reduce costs related to overstock or keeps users interested by continually offering new music, and increasing
stockouts, and enhance customer satisfaction by ensuring that desired user activity on Spotify amplifies the AI’s proficiency in delivering
products are available when needed. recommendations (Cohen, 2022). Not just customers but artists take
Although the ability to forecast consumer behavior and trends has advantage of the available data to understand who is listening to their
changed CRM, predictive analytics has limitations and drawbacks (e.g., tracks to determine prospective engagement, release methods, or even
Brynjolfsson et al., 2021). The reliability and accuracy of the data are future career paths (PUSH.fm, 2023). Another interesting example is the
critical components of predictive analytics. Inaccurate projections can houseplant brand “The Sill,” which categorizes customers based on their
be made due to inaccurate or inadequate data, which leads to the lifestyles. They offer a pet-friendly subscription for animal owners and
formulation of poor business plans and decisions. Data integrity is, an easy-care option for busy individuals (Davey, 2023).
therefore, crucial, yet consistently maintaining high-quality data can be A notable perspective in customer segmentation and personalization
challenging and time-consuming. Similarly, manipulative marketing is the mutual interest of companies and customers alike in understand­
strategies have been in use for a long time. However, these strategies, ing consumer profiles (Chamorro-Premuzic, 2023). The capabilities of
when combined with the extensive amounts of data for AI predictive AI extend beyond the modulation of consumer behaviors; instead, they
algorithms, have far expanded the capabilities of what firms can do to uncover the deeper layers of consumer identity, which can also be
drive users to choices and behaviors that ensure higher profitability interesting information for individuals. In this context, AI offers a unique
(Bansal, 2021). chance to boost self-understanding and allows consumers to become not
Therefore, while predictive analytics can provide valuable insights, just smarter shoppers but also people with a better sense of themselves
they should be used to supplement rather than replace human decision- (Aw et al., 2022). For example, using response language models, chat­
making, at least at the current stage of technological advancements. A bots can be programmed such that they can predict a consumer’s per­
lack of human oversight can lead to an over-reliance on technical pro­ sonality during an interaction (Fan et al., 2023). This allows a chatbot to
jections, which may fail to account for unforeseen variables or contex­ tailor its personality to match the consumer’s, resulting in increased
tual nuances. consumer engagement with the firm (Mende et al., 2023).
Customer segmentation and personalization. Overall, the utilization of AI-driven marketing tools offers a
Customer segmentation has long been a popular area of research, as comprehensive approach for marketers to achieve various objectives.
marketers have always aimed to sell the right product to the right These tools enable the setting of precise goals, the gathering and analysis
customer. The advent of AI has, therefore, been a game-changing factor of relevant data, the selection of suitable AI methodologies for data
that can make dreams come true. Using AI to segment customers and evaluation, and the training of AI models using historical data. Addi­
customize services to their specific needs is now more than just a stra­ tionally, they can also refine data attributes to improve the model’s
tegic choice; it is necessary. The push for social distancing during the forecasting capability, perform statistical evaluations to confirm preci­
COVID-19 pandemic has solidified the trend of online shopping, and sion and dependability, transform data into visual representations such
offering tailored recommendations has proven to be a highly effective as charts and dashboards, and continuously refine AI models to adapt to
approach for e-commerce sites (Wang et al., 2021). With AI technologies evolving data (Analytics Vidhya, 2023a). Furthermore, marketing plat­
such as facial recognition, queue detection, visitor counter, and activity forms such as HubSpot and Salesforce Einstein use AI to develop
visualizer, customer segmentation is even accessible at physical touch­ customer personas to understand the preferences, motivations, and pain
points (Klimek, 2020). points of different clusters of customers (Baker, 2023). This under­
Customer segmentation with AI goes beyond demographic and standing is not limited to current customers; it encompasses leads and
geographic classifications and has many dimensions, including psy­ potential customers. AI tools score each lead based on engagement levels
chological and behavioral aspects (Mende et al., 2023). Machine and behavioral patterns, then target them with tailored marketing
learning algorithms identify specific emotions and requirements of campaigns (Nicole, 2023). For instance, financial institutions utilize
customers and suggest relevant products or services accordingly. In this machine learning engines to analyze transaction histories, account bal­
regard, experts indicate the usage of product reviews and customer ances, and credit scores to introduce new services or offer more
feedback for more accurate segmentation, as individuals usually share personalized investment consultations. Considering the importance of
their sentiments and experiences with the product or service in these these insights, the following proposition is offered:
channels (Reddy et al., 2023). Furthermore, as data flows in, AI systems
Proposition 1a. : AI-generated insights can enhance the prediction of
dynamically adjust and optimize their segmentation tactics in real-time,
customer purchasing behaviors across various channels and touch­
ensuring that marketing efforts remain relevant and timely.
points, thereby significantly influencing product development within
AI is also making strides in the field of education. When instructors
competitive market landscapes.
think of testing students’ knowledge, exams and tests are the main
factors for them to analyze. This aspect can change as AI tools can be Although AI-driven segmentation offers businesses a powerful tool
used to analyze students’ educational data to assist teachers in creating for understanding their customers’ needs and preferences more accu­
personalized learning plans (Kumar, 2021). For example, Brightspace rately, it has potential risks and challenges. Mis-segmentation, where
Insights by D2L can analyze data from online sources, publishers, and inaccurate data or flawed algorithms misclassify customers, can lead to
learning apps to come up with a student’s learning behavior. Bright­ misdirected marketing efforts and potentially alienating consumers. For
space Insights provides teachers with information for them to decide example, in the healthcare system, if the data fed into the AI system is

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flawed or incorrect, the AI’s clinical recommendations can also be off the experience using four key components: natural language processing
mark, leading to inappropriate treatment suggestions (Kristiansen et al., (NLP), machine learning, neural networks, and deep learning (Arora,
2022). There is also the problem of maintaining a balance between 2023; De Bruyn et al., 2020). NLP allows machines to process and
personalization and inclusiveness so that marketing communications do interpret human language, simplifying text data analysis and the
not mistakenly reject potential buyers outside of the established groups. extraction of customer sentiment and important themes. Machine
Instagram algorithms are known for creating a bubble that becomes so learning utilizes algorithms to analyze data and predict outcomes
tailored to an individual’s preferences that they inadvertently isolate the without being explicitly programmed, aiding in identifying patterns like
user from diverse content and perspectives (Bradley, 2016). Above all, fraud. Neural networks, inspired by human brain activity, are linked
balancing technological and human service delivery is crucial for nodes that analyze data and are used in applications such as image and
brands, especially accommodating customers who prefer personal in­ speech recognition. Finally, deep learning, a subset of neural networks,
teractions, such as vulnerable demographics like the elderly or those specializes in making exact predictions by training models on large
with limited digital skills (Dwivedi et al., 2021). These preliminary in­ amounts of data and is helpful in various AI applications, including
sights set the stage for further investigation. Hence, in the case of handling unstructured data in AI analytics (Shetty et al., 2020).
AI-driven customer insights, we propose the following: AI-powered tools are varied and can be used for different purposes,
from analyzing website traffic and social media engagement to assessing
Proposition 1b. : The constraints inherent in AI technologies can
consumer behavior and estimating sales trends (Friedman, 2023). They
substantially diminish their capacity to provide actionable customer
can be categorized in various ways (e.g., copywriting, editing, digital
insights, potentially leading to diminished effectiveness in decision-
marketing, and automation categories), each tailored to fulfill specific
making processes.
objectives within the marketing landscape. Jasper, Writer, and Surfer
SEO are some of the tools used to accelerate and automate content
2.5.1.2. Theme 2: Measuring marketing performance. Analytical mar­
writing and enhance the copywriting process by including characteris­
keting capabilities empower organizations with a sophisticated
tics that appeal to target audiences. For example, Surfer SEO focuses on
approach to measuring marketing performance. Employing AI in mar­
elevating web page content quality to achieve higher rankings on search
keting initiatives yields a wealth of data, which remains valuable
engine result pages by analyzing and comparing content with
beyond post-campaign execution or algorithm-driven advertising. This
top-ranking pages and providing recommendations for SEO optimiza­
data, rich in potential insights, can be instrumental in evaluating per­
tion (Matošević et al., 2021). Also, for digital marketing processes,
formance and engendering insightful analyses concerning campaign
Seventh Sense uses behavior profiling to identify optimal email
outcomes for informed decision-making.
campaign timing for each contact, and Optimove provides a customer
Natural language processing, linking similar products based on
data platform with insights into customer behavior and campaign
consumer research, semantic understanding, and relevance instead of
performance.
optimization, continues to drive the features of an AI-powered offering.
Marketing practitioners also emphasize utilizing an integrated mar­
Furthermore, it is possible to apply these aspects to content creation. For
keting analytics platform to have a centralized data flow, improve data
instance, AI enables the development of content-focused advertising, as
accuracy, and create a holistic overview of the marketing ecosystem.
seen in the case of McCann’s AI tool, wherein the tool aids the creative
One premier example is Adobe Analytics solution, which provides
team in scripting and filming commercials that resonate closely with the
marketers with real-time information and in-depth segmentation across
intended audiences (McEleny, 2016). Tools such as Grammarly and
several marketing channels. This platform has customers among leaders
Quillbot can predict what the user wants to say and give recommen­
of industries, and nine of the top 10 U.S. brands rely on it (Cohan, 2023;
dations to make the content concise and relevant. There are some areas
Forbes Technology Council, 2023). It aids in comprehending the efficacy
where AI is better than humans in content marketing tasks, such as
of marketing techniques in boosting traffic and revenue. Ad hoc analysis,
writing e-mail subject lines and suggesting keywords. As a result, com­
attribution modeling, audience targeting, customer journey mapping,
panies can design their digital marketing strategies more efficiently by
and other functions are available through the platform (Analytics Vid­
using AI, which can result in superior marketing performance (Kumar,
hya, 2023b). Another key player is Marketo, now a part of the Adobe
2021).
family. Marketo stands out for its robust marketing automation capa­
Regarding supervision and performance measurement, various AI
bilities, which AI significantly enhances. It specializes in lead manage­
tools are accessible to marketers. To evaluate the effectiveness of various
ment, nurturing, and scoring, making it a vital tool for B2B marketing
advertising efforts, AI algorithms examine click-through rates, conver­
professionals.
sion rates, and consumer engagement levels. Marketers will then decide
These examples show the diverse and transformative impact of AI-
which campaigns impact the audience and which require performance
powered analytics tools across various aspects of the marketing
optimization.
domain. Moving forward, smart use of AI-powered technologies will be
This discussion on measuring marketing performance is anchored in
critical in navigating market complexities, adjusting to changing
the analytical marketing capabilities and is explored through two sub­
customer behaviors, and guaranteeing long-term corporate growth in
themes: (a) AI-powered analytics tools and (b) real-time performance
the increasingly digitized world.
tracking. AI-powered analytics tools not only enable companies to
Real-time performance tracking.
execute campaigns but also help them analyze the outcomes and
In the fast-paced, evolving industry landscape, firms must grasp
anticipate future market trends. Beyond that, real-time performance
current customer needs and sentiments (Zaki et al., 2021). Leveraging
monitoring highlights AI’s dynamism and rapidness in marketing per­
advanced AI and analytics tools, companies can instantly capture and
formance evaluation.
analyze customer feedback, allowing them to adjust their products,
AI-powered analytics tools.
services, or marketing strategies immediately. This level of responsive­
AI data analysis is the application of AI techniques and algorithms on
ness not only maintains business visibility among target audiences but
large data to interpret and gain a deeper understanding of the perfor­
also fosters enhanced trust and loyalty.
mance and to have data-driven decision-making (Analytics Vidhya,
Real-time performance tracking using AI involves several key phases.
2023a). Over 40% of marketers have not only seen an uptick in the
Real-time performance tracking via AI consists of collecting, processing,
number of campaigns they managed from 2021 to 2022 but also have
enriching, and transforming raw data from various sources into valuable
witnessed a surge in their campaign successes, underscoring the impact
insights (Bonderud, 2023). AI engines enhance this data to formulate
of AI-powered analysis (Decker, 2023).
detailed user profiles. In the monitoring phase, AI aids in data visuali­
AI analytics combine many aspects of AI to provide a modern data
zation and instant report generation, with a marketing dashboard

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displaying data through key performance indicators (KPIs) (Mattison, processes to preserve information. Furthermore, with organizational
2023). For example, Google Analytics dashboards provide a full growth, the quality and reliability of real-time data, integration of data
perspective of website performance and display real-time data on user from diverse sources, and system scalability emerge as crucial consid­
engagement, traffic sources, user demographics, and other metrics erations. These insights call for an exploration to inform the future en­
necessary for making informed marketing decisions (Sussman, 2020). deavors, therefore, we propose that:
In the decision-making phase, AI helps to set predefined rules or
Proposition 2b. : The constraints inherent in AI technologies can
algorithms based on organizational objectives and operational needs,
substantially diminish their ability to measure marketing performance,
and these algorithms will then trigger particular actions accordingly. For
potentially leading to diminished accuracy and reliability of marketing
example, assume a customer frequently browses a specific product
performance measurement processes.
category from Amazon, such as electronics, but does not make a pur­
chase; Amazon’s AI system, which has predefined rules, recognizes this
2.5.2. Technological marketing capabilities
pattern and immediately triggers an action to send an optimized mes­
Technological marketing capabilities center on integrating and
sage to the customer with a special discount on electronics products
applying AI technologies to enhance marketing efforts while also
(Bhattacharya, 2019). This action, informed by real-time data and
addressing the ethical concerns they raise. This capability is studied
executed by AI, tries to benefit from an opportunity (potential customer
through the following themes: automated marketing strategies and
interest) and improve performance (increase sales) by providing the
ethical implications. Automated marketing strategies highlight the role
customer with a timely and relevant incentive.
of AI technologies in automating and enhancing marketing processes
Besides gathering data from customers’ actions through various
like customer services and ad placements (Manis & Madhavaram, 2023).
touchpoints, AI can analyze sentiment in real time to generate market
Key elements of AI marketing automation encompass programmatic
intelligence on consumers’ emotions and brand perceptions (Rambocas
advertising, chatbots, and virtual assistants (Chen et al., 2021; Ciuchita
& Pacheco, 2018). Using machine learning engines, marketers observe
et al., 2023). These components uncover a landscape where technology
texts, grammatical structures, and emoji usage to predict how the user
seamlessly merges with marketing, leading to more efficient, targeted,
feels and adjust their marketing initiatives accordingly (Ma et al., 2018).
and better customer service (Gkikas & Theodoridis, 2022). Technolog­
One of the established uses of machine learning for sentiment analysis is
ical marketing capabilities also prompt ethical considerations, empha­
in the hospitality and tourism industry, where there is a need to un­
sizing the importance of safeguarding data privacy and security to
derstand and respond to customer feedback in real time (Mehraliyev
uphold the integrity and confidentiality of information (Stahl & Wright,
et al., 2021). For example, Tripadvisor’s Live Sentiment Dashboard
2018). Similarly, the theme addresses algorithmic bias and discrimina­
provides daily actionable intelligence by analyzing data from 50 tourism
tion, highlighting how algorithms can unintentionally reinforce preju­
touchpoints, including real-time conversations on platforms like Tri­
dices, leading to unfair or even harmful decisions toward certain groups
padvisor (Tripadvisor, 2021). This dashboard evaluates sentiment to­
(Ferrer et al., 2021).
wards destinations and travel, enabling other companies to gauge their
popularity compared to competitors and adjust marketing strategies
2.5.2.1. Theme 3: Automated marketing strategies. Technological mar­
accordingly.
keting capabilities set the stage for optimizing and simplifying the
In sum, the AI-enhanced analytical tools empower companies to
execution of demanding marketing tasks while also personalizing
make informed decisions for future strategies and operations, guided by
customer communication, optimizing marketing budgets, and ensuring
the patterns and trends from the past (The Upwork Team, 2023). By
accurate targeting (De Bruyn et al., 2020). This automation not only
examining consumer habits, purchasing trends, and engagement in­
speeds up the nurturing of high-quality, sales-ready leads but also frees
dicators, AI-enhanced analytical tool offers a more complex analysis of
up time for strategic, high-value work (Järvinen & Taiminen, 2016).
marketing effectiveness, allowing marketers to adjust their campaigns to
While the exact functionalities vary between solutions, marketing
fit the requirements and preferences of individual customers. By staying
automation systems can help organizations with various approaches. For
attuned to real-time customer needs and sentiments, firms can cultivate
example, Oracle offers a marketing automation solution called “Oracle
better customer relationships. This, in turn, elevates customer satisfac­
Eloqua,” which provides comprehensive marketing automation tools for
tion and carves a competitive edge in the marketplace. Similarly,
B2B marketers. The platform allows businesses to plan and execute
AI-enhanced analytical tool can analyze real-time data, detecting risks
campaigns, nurture leads, and measure and analyze marketing perfor­
like fraud or breaches, enabling proactive measures to minimize losses.
mance. Features include programmatic advertising, campaign manage­
Hence, enabling companies to forecast future risks, implement pre­
ment, lead scoring, segmentation, and integration with CRM systems
emptive strategies, and enhance resilience and security. These obser­
(Allen, 2019; Olenski, 2022).
vations serve as the foundation for further inquiry, and it is thus
Two critical components of marketing automation—namely (a)
proposed that:
programmatic advertising and (b) utilization of chatbots and virtual
Proposition 2a. : The implementation of AI, including AI-powered assistants, will be investigated in this theme. As part of the technological
analytics tools and real-time performance tracking, can have both marketing capabilities, these components reveal a landscape where
short-term (e.g., optimize operations, insight generation, cost reduction) technology and marketing intertwine to create more efficient, targeted,
and long-term (e.g., enhanced predictive capabilities, innovation ac­ and user-friendly customer experiences.
celeration, risk mitigation) effects on marketing performance metrics. Programmatic advertising.
Programmatic advertising (PA) has emerged as a transformative shift
Even though AI is powerful, it can’t independently and consistently
in media buying over the past decade (Stevens et al., 2016). This tech­
organize and manage successful marketing campaigns for a diverse
nology has witnessed a surge in its share of total online advertising. This
consumer base, necessitating oversight and supervision (Geyser, 2023).
rise has paralleled advances in cost-effective and efficient techniques for
While understanding customer future behavior and real-time perfor­
online consumer tracking and targeting (Cooper et al., 2023). Antici­
mance tracking have become essential for supporting rapid
pated to ascend to $558 million in 2023, global programmatic adver­
choice-making and improving user experience, they are not without
tising expenditure is on a notable upward trajectory, marking a 13.1%
obstacles. Firstly, managing massive amounts of real-time data can be
increase from 2022 and nearly doubling the figures recorded in 2019
challenging, possibly leading to data overload, and hampering the
(Statista, 2023a). Global programmatic budgets will rise by over $300
extraction of relevant insights using AI tools (MarketScape, 2023). The
billion within the next four years (Davis, 2023).
next challenge is data privacy and security, especially in an era when
The core elements of programmatic advertising involve advertisers,
data breaches are not uncommon, which mandates robust cybersecurity

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publishers, demand-side platforms (DSPs), and data management plat­ computers but also broadened the applications and use cases for chatbot
forms (DMPs) to manage ad inventory and campaigns (Chen et al., 2019; technology (Chkroun & Azaria, 2021).
Kiran & Arumugam, 2020; Riley, 2023). Advertisers market their Chatbots are agile and powerful tools for generating leads and
products or services by reaching specific audiences via digital adverts. facilitating two-way communication that boosts company sales (Ill­
They manage their ad campaigns and buy ad inventory using DSPs escas-Manzano et al., 2021). With the advancement in technology,
(Kiran & Arumugam, 2020). DSPs are central to AI-powered program­ chatbots are being programmed such that their ability to recognize,
matic purchasing. Based on algorithms targeting specific demographic simulate, and react to emotions appropriately, as humans do, is
groups, DSPs allow marketers to choose which impressions to buy and improving (Adamopoulou & Moussiades, 2020), leading to more
determine how much to bid on them. Publishers are website owners or engaging customer experiences (Tsai et al., 2021). For example, Woebot
managers who offer locations for marketers to show advertising mate­ is an encrypted emotional chatbot that provides mental healthcare (i.e.,
rials on their websites to monetize their content (Riley, 2023). Next are acts as a trusted companion), particularly useful for reducing anxiety
DMPs, which create detailed user profiles using machine learning al­ and depression. These encrypted emotional chatbots have practical
gorithms by collecting data across multiple platforms and transforming implications for aging customers who require more enhanced and
high-dimensional data into numerous “tags,” allowing for precise and personalized engagements (Iancu & Iancu, 2023).
flexible user targeting (Duan & Yang, 2018). When a user visits a pub­ In today’s consumer landscape, there is a growing demand for
lisher’s website, DMPs share the user’s details and the accessible ad seamless and immediate experiences (Ostrom et al., 2021). AI chatbots
space. The space is then auctioned off to the advertisers via DSPs. The and virtual assistants are well-suited to meet this expectation.
advertiser with the highest bid can display their ad to the user. This Leveraging vast amounts of data, chatbots can foster a relationship be­
automated process guarantees that advertising is shown to the most tween customers and the firm by offering speed, convenience, person­
appropriate audiences, boosting the probability of engagement and alization, and seamlessness (Kumar et al., 2019)—benefits that align
conversion. with the expectations of today’s digitally connected consumers
Programmatic advertising has diversified substantially, reaching the (Fotheringham & Wiles, 2023). For marketers, AI chatbots offer an
target consumers across numerous digital channels. These channels economically efficient method to expand their reach and seamlessly
include display and video ads; programmatic TV advertising, which manage customer interactions across various platforms (Kshetri et al.,
enables advertisers to detect competitor ad placements and strategically 2023). Successful chatbot implementation enables businesses to expand
schedule their own; and digital out-of-home (DOOH), which presents their customer service capabilities, supporting growth without addi­
dynamic ads in public spaces with real-time data adaptability (Guitart tional training and hiring expenses (Iles, 2020).
et al., 2020; Riley, 2023). Advertisers typically use a combination of While chatbots in marketing services help provide simple, rapidly
these channels to create a cohesive narrative, ensuring that messages are received information, respondents are also concerned about chatbots
not only seen but also contextually relevant and engaging to the audi­ providing incorrect and misleading information (Arsenijevic & Jovic,
ence across multiple touchpoints. 2019). Moreover, there is a growing interest in designing multi-chatbot
A successful example is The Economist, which has utilized subscriber systems where each chatbot acts as a product/domain-specific adviser.
data to curate tailored content for its “intellectually curious” audience. In this regard, it is highlighted that a multi-chatbot interface might
The Economist effectively targeted programmatic ad buying, presenting induce user confusion and unfamiliarity, which can decrease trust in
ads in real-time based on web page context and viewer profiles. These digital commerce platforms (Tan & Liew, 2022). To address these
ads led users to relevant articles with subscription offers. With a £ 1.2 challenges, businesses need to focus on enhancing chatbot technology to
million media budget, the campaign attracted 650,000 new prospects make it more human-like, empathetic, and transparent in its interactions
and prompted 3.6 million actions post-ad viewing (Keane, 2023). with consumers (Kshetri et al., 2023; Tran et al., 2021). These digital
However, due to the complexity and quick growth of PA technologies, assistants are anticipated to expand as technology advances, necessi­
marketers must engage in continual learning and adaptation to prevent tating ongoing research and understanding of their capabilities and
obsolescence and guarantee that their tactics are optimal for the current implications. Businesses and researchers must find a balance between
digital ecosystem. While PA is a robust tool for modern digital market­ using this technology and maintaining the human element, which is
ing, it also needs careful maneuvering to avoid potential hazards and fit critical for meaningful consumer connections in the digital communi­
with both ethical issues and corporate objectives. cation era.
Chatbots and virtual assistants (generative tools). Overall, as an automated, big-data system, Programmatic Adver­
The current technologically advanced era demands a heightened tising (PA) empowers organizations to bid for the chance to showcase
understanding of the needs and demands of customers, particularly in a personalized advertising in the most pertinent locations and times for
progressively competitive marketplace. Intelligent agent technologies the targeted audience (Samuel et al., 2021). This type of advertising uses
fundamentally alter frontline service interactions and stand out as a web users’ digital footprints and presents relevant ads to them (Benady,
primary means to achieve this objective (Kumar et al., 2016; Robinson 2015). Employing sophisticated software and algorithms to acquire ad
et al., 2020). Chatbots are AI engines designed to engage in sequential impressions through ad exchanges, PA ensures that not only brand’s
dialogues to reach a specific outcome, serve as facilitators for humans message reaches its precise audience at the opportune moment (Riley,
(Illescas-Manzano et al., 2021). 2023), but also allows the brands to have access to many publisher sites
It was not until the mid-2010 s that chatbots began to gain notable simultaneously. Similarly, digital assistants such as chatbots use natural
prominence in people’s lives. For example, Capital One’s Eno and Bank language processing to recognize patterns from data using techniques
of America’s Erica entered the banking sector as AI-powered virtual such as facial recognition, speech recognition, and text mining to
banking assistants, offering mobile phone users assistance in handling simulate human conversation, improving user engagement and offering
their queries and financial matters. In 2016, Facebook opened its plat­ prompt support (Fan et al., 2023; Kshetri et al., 2023). These initial
form to chatbots, allowing businesses and developers access to its large observations pave the way for a deeper investigation. Hence, we
user base (Yadron & Kiss, 2016). This shift not only propelled chatbots propose:
into mainstream consumer technologies but also provided businesses
Proposition 3a. : Implementing automated marketing strategies like
with a new option to interact with clients familiarly and comfortably.
programmatic advertising, and chatbots/virtual assistants can lead to a
Furthermore, the advent and adoption of intelligent assistants such as
substantial increase in long-term loyalty and improved customer
Amazon’s Alexa, Google Assistant, and Apple’s Siri aided in integrating
retention for companies.
conversational AI into daily life. These virtual assistants not only
increased people’s familiarity and comfort when conversing with Even though AI chatbots and virtual assistants have clear, well-

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defined customer and firm benefits, there exist multiple drawbacks and they will actively share personal information in exchange for receiving
challenges associated with their widespread adoption. Interactions with rewards and incentives (Wang et al., 2021). It is also suggested that
chatbots can influence consumers’ expectations, potentially affecting regulators enhance supervision to increase consumer trust and protect
how they anticipate future interactions with human agents. For privacy. In the healthcare sector, Larson et al. (2020) advocate that all
example, a chatbot’s quick response may lead consumers to expect organizations that access clinical data should act as “data stewards,”
similar response times from human agents. This is crucial since chatbots with a duty of confidentiality to patients to protect their privacy and to
often work alongside, not in place of, human agents. Similarly, con­ the public to guarantee that data is freely accessible for the development
sumers may perceive AI chatbots as inauthentic (Liu-Thompkins et al., of knowledge and tools to assist present and future patients.
2022). This perception can arise because of automated information, AI systems amass vast amounts of data, and when such data is un­
which may appear robotic, given chatbots’ ongoing challenges in com­ linked or not attributable to a specific individual, it may not directly
prehending and showing empathy for the complex emotional and per­ infringe on that individual’s privacy (Elliott & Soifer, 2022). Companies
sonal aspects (Crolic et al., 2022). Similarly, PA has grown rapidly and is should harness this data by crafting algorithms that do not necessitate
well accepted, there have also been cautionary tales of costly blunders the identification of whom the data belongs to (World Economic Forum,
(Samuel et al., 2021) and ineffective advertisement campaigns (Bak­ 2022). This could be achieved through databases that employ anony­
payev et al., 2022). Some campaigns have received backlash owing to mous identifiers, thwarting recognition or association with individuals
incorrect ad placements or mismatched targeting, underscoring the or groups. For example, in the retail sector, AI systems can be engineered
significance of a well-planned approach. Among the companies that such that purchasing data does not directly correlate to individual
faced problems was JP Morgan Chase, which removed its advertise­ customer profiles; instead, each set of purchasing habits is assigned an
ments from YouTube after they were mistakenly displayed alongside identifier. This allows the retailer to glean insights regarding product
unsuitable and extremist content because of PA errors (Maheshwari, popularity without encroaching on customer privacy. Similarly, firms
2017). Furthermore, Adidas suspended its advertising on YouTube after utilize anonymous surveys to garner feedback on their performance,
its ads were shown alongside exploitative videos of children (Good­ often offering compensation to participants as an incentive.
fellow, 2017). Based on above discussion and insights, we present the Although using anonymous identifiers is a well-known and efficient
following proposition: way to maintain data privacy, there might be instances where they may
pose risks and influence security interests. For example, suppose the
Proposition 3b. : Incorporating AI into traditional marketing strate­
anonymous identifier is associated with a set of purchasing behaviors
gies can pose considerable challenges, potentially requiring innovative
that the AI considers high-risk (e.g., frequent purchases of high-value
solutions to overcome hurdles and ensuring successful implementation.
items); in that case, the identifier can be flagged as a high-risk
customer. Such identifier can be later used to inform the credit service
2.5.2.2. Theme 4: Ethical implications. In the evolving digital landscape,
company that provides loans or credit to customers, and even though the
AI-driven technologies have penetrated multiple industry sectors, from
initial data collection did not directly link purchasing habits to specific
healthcare and finance to education, criminal justice, and customer
individuals when a customer applies for credit from the business, the AI
service, to name a few (Ettari et al., 2022; Mende et al., 2023; Mishra,
may match their purchasing patterns with the anonymized high-risk
2023; Noble & Mende, 2023; Svetlova, 2022; Wirtz et al., 2022). This
profile. This can potentially influence the decision of the credit card
research has consistently demonstrated a connection between AI and
company to deny credit or offer less favorable terms.
issues about ethics, justice, and privacy. AI’s strong performance hinges
Moreover, knowing that there is a thin line between data privacy and
on large datasets, advanced algorithms, and detailed machine-learning
artificial intelligence, there might be instances where using private in­
methods (ET Online, 2023). While this approach offers accuracy and
formation is inevitable, and there are numerous secure ways to use it
automation, it also requires handling various data types. Each type
non-invasively. Data encryptions and access controls are a way to pre­
presents potential ethical and privacy challenges, impacting not only
vent unauthorized access. For example, homomorphic encryption allows
individual users but the broader society (Wirtz et al., 2022).
calculations on encrypted data without decrypting it (Ren et al., 2021).
Crucially, the ethical dimensions of AI transcend mere technological
Scientists also suggest on-device processing and federated learning to
boundaries. They encapsulate broader sociological, psychological, and
process data directly on the user’s device and train computer models on
cultural implications. This necessitates a comprehensive, multi-
devices without moving the actual data around (Li et al., 2020). Data
disciplinary strategy, warranting both corporate and governmental
retention policies also ensure that data is stored only for the required
intervention, to effectively comprehend and modulate them.
duration and is securely deleted after that period.
We delineate two primary focal areas. First, data privacy and secu­
Another pressing matter is the accountability aspect of data privacy,
rity: In the AI landscape, data is akin to the fuel that drives the ma­
which extends beyond mere compliance with data protection laws.
chinery; its purity and safety ensure the engine’s optimal operation.
Accountability for companies means not only implementing systems
Second, algorithmic bias and discrimination: Algorithms, when left
that protect data but also being responsible for decisions made based on
unchecked, can unknowingly perpetuate prejudices, which can lead to
that data. With AI’s role in data collection and analysis, the traditional
decisions that are not only unfair but could also harm certain sections of
clarity of human responsibility becomes blurred, necessitating strategies
the population. The objective is to highlight the array of ethical chal­
for transparency and explainability in AI systems (Collina et al., 2023).
lenges within the AI realm through these subthemes while offering
This is critical in ensuring a clear line of accountability in AI-informed
pragmatic insights, guidelines, and methods that could steer the ethical
processes. In this regard, Wirtz et al. (2023) introduce the concept of
evolution and application of AI systems.
corporate digital responsibility (CDR) and emphasize tactics and pro­
Data privacy and security.
cedures that businesses can employ to establish a robust CDR culture
The discourse on privacy and AI often centers on striking a balance
(Kunz & Wirtz, 2023). An example of the accountability challenges is
between a “right to privacy” and the benefits that come from granting
Meta’s recent $51 million settlement in a class-action lawsuit in Canada
companies access to user data, such as improved service personalization,
as a result of AI-driven marketing strategies (CBC/Radio Canada, 2024).
augmented corporate profitability, and the establishment of a regulatory
In this instance, Facebook has used users’ images in their AI-generated
framework conducive to optimal outcomes (Elliott & Soifer, 2022).
ad without explicit user consent, which underscores the crucial need
Some experts emphasize gaining customer trust, while others emphasize
for responsible data practices and the potential repercussions of failing
building clear frameworks and using more secure algorithm de­
to adhere to these standards.
velopments (Forbes Technology Council, 2023). For instance, it is
Algorithmic bias and discrimination.
argued that when customers understand the benefits of AI applications,
In the realm of machine learning algorithms and data interpretation,

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the issue of algorithmic bias and discrimination stands out as a well- beyond alleviating customers’ anxieties and concerns; they are intrinsic
acknowledged yet critical concern. Algorithmic bias refers to persis­ to the company’s core organizational principles, business operations,
tent, systematic errors in computer systems that result in unequal out­ and security management. Companies that use AI in any aspect of their
comes, such as favoring a particular user group. This bias can stem from business, whether upfront or in the backend, should address these
several sources, including skewed training data, erroneous model de­ concerns contextually. It can start with transparent communication and
signs, or biased decision-making processes (Zewe, 2022). For example, security protocols and move further to regular employee training and
Buolamwini and Gebru (2018) found that commercial AI systems from developing new products, services, or processes that integrate privacy
companies like IBM, Microsoft, and Face+ + had significant issues with considerations from the outset. This examination lays the groundwork
gender classification bias. The systems were tested on a dataset of faces, for advancing our understanding further, it is thus proposed that:
and the findings revealed that the facial recognition software did well in
Proposition 4a. : The development of AI frameworks that emphasize
classifying the gender of people with lighter skin tones but suffered a lot
fairness, transparency, and responsible practices can help firms to better
with those with darker skin tones, especially women.
govern the application of AI in marketing.
Furthermore, AI harbors a more profound, more complex impact on
society. For instance, biased algorithms in financial technologies could Amidst the ongoing discourse surrounding bias, it is crucial to
yield unfair loan approval rates across diverse racial or socio-economic recognize that bias is inevitable in AI as these machines and technologies
groups. Likewise, with facial recognition technologies, biases against are built by humans, who have their own perceptions and biases of
certain ethnicities or genders may result in misidentification and unjust events (DataForce, 2022). Transparent algorithm design can help
treatment. In this vein, Ledford (2019) noted that an algorithm preva­ develop both explainable and transparent algorithms for stakeholders.
lent in the U.S. aimed at predicting patient referrals to programs for The first step in reducing these biases is ensuring inclusive and repre­
enhanced care demonstrated a lesser likelihood to recommend Black sentative data collection and processing. Going forward, the onus should
individuals compared to White ones. be on minimizing these misunderstandings to build systems that can
In the context of marketing, recommendation algorithms on e-com­ work without discrimination. In the rapidly evolving field of AI, it is
merce platforms can reinforce and magnify existing social and economic suggested that bias research be at the forefront to help establish pro­
imbalances by recommending lower-quality or cheaper products to cesses that consciously reduce bias. This involves comparing the outputs
lower-income individuals. Similarly, advertising algorithms may of algorithms with human decisions and employing “explainability
exclude users from an ad due to their interests in specific ethnic groups. techniques” to understand the differences in decision-making processes
Addressing biases, showcased in the earlier examples and underscored (Dallanoce, 2022). Exploring the potential of human-machine collabo­
in a report by the New York Times on Facebook’s allowance for adver­ ration to reduce bias is also advised, including implementing
tisers to exclude users based on “ethnic affinity” in housing-related “human-in-the-loop” processes (Wolfewicz, 2022). Finally, increasing
ads—a practice in violation of the U.S. Fair Housing Act—is more investments in bias research, providing more data, and diversifying the
than a technical challenge; it is an ethical imperative calling for a AI community are other vital steps to position and address these chal­
comprehensive strategy (Benner et al., 2019). lenges strategically. These insights set the stage for further investigation.
The above discussion illustrates that despite the considerable atten­ Therefore, it is proposed:
tion and various approaches from authors and practitioners, the journey
Proposition 4b. : Ethical considerations related to data privacy, se­
toward mitigating biases and discriminations in AI is still a long one.
curity, and algorithmic bias in AI-driven marketing practices can
There is a long path ahead to reach a satisfactory point where we can
significantly enhance the trust levels of both consumers and employees.
confidently affirm that biases and discriminations have been adequately
minimized.
2.5.3. Strategic efficiency capabilities
Beyond data privacy and algorithmic bias, several additional risks
Strategic efficiency capabilities focus on strategically deploying AI to
associated with AI could impact organizations, consumers, and society.
optimize marketing operations and enhance customer experiences
These include challenges in the governance and learning capabilities of
beyond expectations (Campbell et al., 2020). It involves balancing the
AI systems, concerns about the quality of data feeding into AI/ML sys­
practical and the innovative potential of AI to revolutionize customer
tems, and the susceptibility to various AI/ML attacks, such as data
experience and satisfaction through personalized and responsive expe­
poisoning and adversarial inputs (Mudgal et al., 2023). Moreover, issues
riences. This capability is studied through two themes: enhancing
in effectively testing AI systems and ensuring transparency also present
customer experiences and growth opportunities with AI implementa­
significant risks, necessitating careful management and oversight. To
tion. Enhancing customer experiences relates to real-time customer
address these issues, the National Institute of Standard and Technology
assistance as a form of support beyond chatbots, available at any point in
(NIST) released the AI Risk Management Framework (AI RMF 1.0) in
the customer journey and capable of addressing and resolving problems
January 2023. This framework, developed collaboratively with private
immediately (Manis & Madhavaram, 2023). Furthermore, we explore
and public sectors, aims to manage risks in AI, focusing on trustwor­
customer experiences beyond the physical environment, leveraging AI
thiness in AI design, development, and evaluation. It was created
in conjunction with extended realities to create immersive and inter­
through a comprehensive, transparent process involving public feed­
active experiences in various sectors, thereby reshaping customer in­
back and workshops (NIST, 2023). Compliance with such regulations is
teractions and journeys in the digital world (Reiners et al., 2021). In the
crucial, as it ensures that AI systems are developed and deployed with a
case of growth opportunities, we discuss a spectrum of challenges and
focus on trustworthiness, safety, and transparency. It can also help
opportunities in assessing the benefits of early adoption of AI in mar­
mitigate potential harm to consumers and society, thereby enhancing
keting and its long-term advantages.
the credibility and acceptance of AI technologies.
Overall, in the light of recent developments, a critical examination of
2.5.3.1. Theme 5: Enhancing customer experiences. When studying stra­
the ethical implications of AI-driven marketing is a vital concern. The
tegic efficiency capabilities, AI emerges as a compelling tool for busi­
challenges with AI are numerous, ranging from the risk of biased algo­
nesses to streamline operations while significantly improving the way
rithms causing discrimination to concern about data breaches, hidden
customers interact with brands. AI’s role in providing real-time
data selling, and profound ethical dilemmas like forced data sharing and
customer assistance marks a significant advancement in enhancing
losing the human touch (Breidbach & Maglio, 2020; Wirtz et al., 2022).
customer experience. It offers individuals instant, on-the-spot assistance,
For businesses in this complex landscape, a clear, ethics-focused plan is
ensuring their demands are handled effectively and promptly. It also
essential to protect stakeholders’ interests. These concerns underscore
provides a more in-depth understanding of customer assistance beyond
that competent privacy and data management procedures extend

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the basic application of chatbots and virtual assistants. and a virtual trial experience. This AI-driven virtual reality experience
AI also looks at the individual’s behaviors as one browses through has proven to convert 12.4% of fitting consumers into buyers and has led
websites and picks content that grants users a more exceptional expe­ to approximately a 30% reduction in the return rate for certain brands
rience based on previous interests (Kumar, 2021). In such a scenario, (Yang et al., 2022).
information on (a) customer-firm exchanges, (b) the typical consumer Implementing AI within XR presents its unique set of obstacles,
usage behaviors of goods and services, and (c) the typical contact format including technical and accessibility difficulties, as well as concerns
between firms and customers to ascertain the specifics of the firm of­ about health and legal matters. Ensuring that AI-driven XR experiences
ferings to pitch to the right customers. For instance, Google Maps uses AI are smooth, realistic, and glitch-free is a complex and resource-
to provide optimal routes through algorithms and provide road infor­ demanding task. Even if we assume that the technological problems
mation to users. Some other examples of AI solutions geared towards are easy to solve, ensuring that AI-driven XR experiences are accessible
personalization include customizing website content (e.g., Wix), price and inclusive is a significant challenge in the current stage of these
(e.g., Perfect Price – for dynamic pricing), and customer interactions (e. technologies. Important health implications such as eye strain, motion
g., Samsung SmartThings ecosystem). sickness, and potential psychological impacts can be expected due to
Beyond the physical environment, AI’s true potential can be constant exposure to XR (Daşdemir, 2023). Lastly, legal frameworks
unlocked with extended realities. Through investigation of AI’s capa­ regarding data usage and user rights in AI-driven XR are still underde­
bilities within extended realities, we look into the future of a customer’s veloped, which indicates further precautions on the part of companies
journey, envisioning a landscape where every interaction is not only that are developing such technologies (Karp, 2023).
personalized but also deeply immersive, transforming the way brands As we move toward a future in which the digital and physical worlds
connect with their consumers. Hence, in the fifth theme, we discuss become increasingly interconnected, a balanced approach to encourage
enhancing customer experience as a strategic efficiency capability, innovation while protecting user experience, health, and rights will be
examining its potential to redefine both our physical and virtual critical in achieving corporate goals. Technologists, legislators, and in­
environments. dustry leaders must collaborate constructively to develop an approach
Extended realities, the metaverse, and spatial computing. that optimizes advantages while reducing the risks and obstacles.
The past decade has seen a significant increase in academic research Real-time customer assistance.
and practical applications of extended realities in the business and retail Today’s world demands immediate assistance and rapid solutions
sectors (Cipresso et al., 2018; Kumar et al., 2023; Wang et al., 2023). when it comes to enhancing customer journeys. Such assistance, facili­
Large companies such as Coca-Cola, McDonald’s, IKEA, and General tated by AI, not only increases customer engagement, satisfaction, and
Electric are implementing extended reality (XR) in their marketing ini­ loyalty but also provides businesses with a better understanding of their
tiatives (Gilliland, 2021). Additionally, the XR market (i.e., AR, VR, and consumers (Das et al., 2023). AI’s role in providing real-time assistance
Metaverse) is projected to grow to $53.7 billion by 2027 (Statista, can be seen in the case of voice assistants (Kumar, 2021). For instance,
2023b). Amazon, Google, and Apple continue to work on advancing their AI
Three main branches of AI relevant to XR are computer vision, devices. Amazon aims to allow for conversations with Alexa to last
generative AI, and large language models (Jaehnig, 2023). Computer longer without having to repeat the wake word “Alexa” before every
vision helps XR apps recognize and understand environmental elements request. Google’s Duplex on the Web enables Google Assistant to book
and place virtual objects in the real world, allowing them to interact appointments, make reservations, and even book car rentals using
with that environment (Zewe, 2023). Generative AI generates media autofill. Apple plans to update Siri with voice-recognition ability to
formats like photos, films, or 3D assets that can be later used in creating provide the user with customized recommendations.
XR environments. Finally, yet significantly, large language models are There is a broad range of applications for AI-based real-time assis­
utilized to analyze language prompts and return language replies to tance. Cutting-edge AI-driven technologies such as natural language
improve user interactions with non-human agents and characters in processing (NLP), deep learning (DL), cognitive computing (CC), and
virtual worlds (Yang et al., 2022). This results in a more intuitive and machine learning (ML) can help solve problems in real time (Behera
natural user experience. et al., 2021). For example, AI-driven cognitive virtual assistants offer
In an XR environment, AI algorithms examine user and environ­ consistent, personalized, contextual, and instant responses to common
mental data to adjust the real-time XR experience (Barrera & Shah, inquiries. When more complex issues demand human intervention, they
2023). AI-driven machine-learning algorithms can personalize the XR efficiently transfer them to customer service representatives. This tran­
experience based on the user’s actions, preferences, or past behavior sition ensures seamless, personalized, and contextual customer service
(Noble & Mende, 2023; Yoo et al., 2023). For example, BMW uses around the clock. For example, the AI-driven customer support solutions
Tango, Google’s smartphone AR technology that lets users personalize powered by Instacart Storefront convert merchants’ apps into helpful
and engage with a virtual BMW i3 or i8. The virtual car can be placed in assistants, guiding and assisting customers throughout their in-store
the user’s environment using computer vision, and the AI engine sug­ shopping journeys. This novel “AI In-Store” feature helps customers
gests car alterations depending on user interactions and preferences, check stock availability, access detailed information about items on
improving the customer experience in real time. their shopping list, receive product recommendations, and avail them­
The combination of AI and the XR has potential applications across selves of in-store promotions and discounts (Rao & Zhang, 2021; Ryan,
several industries. For example, in the gaming industry, AI can create a 2023). If a specified item is out of stock, the system alerts the consumer
more realistic and dynamic world. This technology can assist in crafting instantly, avoiding any difficulty after the purchase is placed.
virtual worlds that closely mirror our physical environment, create av­ A vital yet often overlooked use of AI in immediate support pertains
atars that look like humans and offer multilingual accessibility (Iliescu, to accessibility features such as image descriptions, voice navigation,
2023; Salazar, 2023; Yoo et al., 2023). In the retailing industry, retailers and personalized content adjustments for all users, particularly those
are employing AI in virtual storefronts to facilitate more immersive with disabilities (Vieira et al., 2022). The app “Seeing AI” is designed for
shopping experiences. Interactive displays and AI-powered chatbots individuals with visual impairments. It is capable of reading and
provide additional product information and create engaging experiences providing descriptions for various types of documents and can recognize
as customers navigate the virtual storefront (Bonetti et al., 2023). images, colors, and faces, offering insights into people’s emotions.
Haomaiyi, a prominent online retailer in China, has developed a virtual Google’s Euphonia is an example that helps individuals with talking
fitting technology that provides every customer with an exclusive AI disabilities (Weitzman, 2023).
fashion consultant. This consultant dynamically matches customer in­ Despite these benefits, many challenges still exist. A significant
formation (e.g., sizes and previous purchases) and provides style advice concern is losing the personal touch of human interaction, which can be

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crucial in building customer relationships (Sever, 2023). The absence of environments, introducing an array of opportunities. AI implementation
emotional intelligence, genuine empathy, and deep contextual knowl­ offers businesses the potential to drive growth, innovation, and
edge in AI-based conversations is also a limitation in some scenarios competitive advantage across various aspects of their operations, posi­
where human touch is needed. For example, the AI assistant, Pi, while tioning them for long-term success in an increasingly digital and data-
applicable for encouragement and support, lacks the emotional depth driven economy. Although AI as a strategic efficiency capability is
and complexity of human connection (Griffith, 2023). In addition, necessary for businesses to improve operations and enhance customer
over-reliance on AI can lead to reduced human staffing, and it may get experience, it is essential to acknowledge its costs and benefits. Due to
challenging when human intervention is urgently needed. the widespread availability and early adoption of rivals, AI does not
Above all, obtaining and keeping user trust is one of the most sig­ offer a permanent competitive advantage. Moreover, machines can
nificant challenging issues for marketers (Danks, 2019; Troshani et al., handle uncertain situations, but they also need defined goals and re­
2021). AI systems are robust but not flawless; they can make mistakes, strictions, which can be absent in some business contexts because of
sometimes due to biases in the data they were trained on and sometimes businesses’ fluctuating internal and external factors. Under these cir­
due to unanticipated events. The inconsistent and unpredictable AI cumstances, humans remain extremely important in situations requiring
behavior can significantly damage consumers’ faith in the system. This high ambiguity and human intuition.
is especially important in sensitive scenarios like healthcare and finance, Within the framework of strategic efficiency capabilities, in this
where mistakes can have serious outcomes. Furthermore, the opacity of theme, we will look into two key factors that influence how AI is used in
some AI systems makes it impossible for consumers to understand how competitive marketing environments, namely (a) early adoption bene­
decisions or judgments were made, undermining confidence even fits, which have several immediate and noticeable advantages to orga­
further. Therefore, finding a balance between AI and human involve­ nizations and individuals, and (b) long-term advantages, which demand
ment emerges as a crucial priority for marketers, allowing them to a more deliberate and strategic approach.
harness the respective strengths of each to deliver highly effective Early adoption benefits.
customer service (Sever, 2023). Companies worldwide have started to adopt AI by integrating it into
In sum, considering the increasing interest in the extended reality their existing marketing systems and processes to get AI-driven insights
(XR), businesses begin taking the next logical steps to make these ex­ that guide decision-making. The adoption rate is expected to grow at an
periences more intelligent and tailored to individual users (Barrera & annual rate of 37.3% from 2023 to 2030 (Haan, 2023). Since the
Shah, 2023). This is where AI becomes the perfect complement, with its adoption is still in its early stages, the process has been dynamic, with
capabilities to process vast amounts of data and learn from user in­ ongoing refinements based on feedback, outcomes, and shifting goals
teractions. Enhancing customer experience in extended realities in­ (Rascop, 2022). The practical advantages and widespread acceptance of
volves leveraging AI in conjunction with augmented reality (AR), virtual AI technology were not as well-known a few years ago as they are now,
reality (VR), and the metaverse to create immersive, interactive envi­ and the market was filled with skepticism and cautious optimism
ronments for customers. This combination provides users with sensory (Bughin et al., 2017; Hagerup, 2023). Hesitancy towards AI adoption in
experiences that can include sight, sound, and even touch, making the those days was attributed to factors like confusion about its practical
digital interaction feel as real as the physical world. Intelligent reality applications, a “wait and see” attitude, fear of the unknown, and con­
(IR)—a fusion of AI and XR—has opened new avenues for innovation, cerns about the investment requirement for implementation (Puntoni
allowing for more personalized and interactive user experiences. Even et al., 2021).
though AI and XR have different origins and objectives, their synergy Companies that adopt AI early on and use it to their advantage are
strengthens the immersive and dynamic aspects and makes them more already experiencing a competitive advantage. For example, companies
intelligent, responsive, and user-specific (Lampropoulos, 2023; Reiners like Google, Apple, and Microsoft were among the first to incorporate AI
et al., 2021). These observations are pivotal for a deeper investigation. into their business process and are now reaping the benefits. Notably,
Hence, we propose: Apple launched Siri in 2011, and Microsoft followed suit with Cortana in
2014 (Kanade, 2022; Sanchez, 2023). Tesla has led the way in incor­
Proposition 5a. : AI can play a pivotal role in shaping seamless
porating AI into its cars, notably through its Autopilot system, which
omnichannel customer experiences by crafting interactive and person­
debuted its initial version in 2014 (Barry, 2021). Many prominent banks
alized customer interactions across diverse industries and platforms.
and financial organizations, like J.P. Morgan and Goldman Sachs, star­
As AI-based real-time assistance can provide support available to ted to use AI for algorithmic trading, fraud detection, and customer
customers at any point in the purchasing journey, it is capable of support chatbots in the early stages.
addressing and resolving problems within seconds. It involves a variety In the marketing domain, Amazon was an early adopter of AI,
of features, among which are delivering instant feedback, individualized employing it for product suggestions, shipping efficiency, and the
recommendations, and efficient problem-solving. AI’s role in real-time Amazon Go retail concept (Harrigan, 2022). Netflix and Spotify have
customer assistance can also be seen in activities such as categorizing also been using AI for years to recommend shows, movies, and music to
support tickets and emails, performing text and sentiment analysis, and their users based on their viewing and listening habits. Starbucks was
facilitating multilingual support (Kleinings, 2023). Overall, the inte­ also an early adopter of AI for personalized marketing through its mobile
gration of AI, particularly through real-time customer assistance, em­ app and uses AI to analyze customer preferences and purchase history to
powers businesses to deliver superior service experiences that are offer personalized offers. This underscores the importance of early
personalized, immediate, reliable, and available round the clock, adoption, not just technological tools and assets; essentially, any
thereby significantly enhancing customer satisfaction levels (Behera resource that companies manage to access before their competitors can
et al., 2021; Das et al., 2023). This analysis serves as a foundation for confer a competitive advantage upon them. As the resource-based view
further inquiry, and hence, we propose: (RBV) highlights, a firm’s competitive advantage is based on valuable,
rare, inimitable, and unique resources (Barney, 1991). When resources,
Proposition 5b. : The integration of AI, such as real-time customer
such as technology, become imitable, securing early access becomes
assistance, can significantly increase customer satisfaction levels,
necessary.
potentially surpassing traditional customer interaction methods in terms
Due to the extensive time and detailed procedures needed to develop
of effectiveness and efficiency.
and implement AI systems, being a follower may not be an optimal
decision (Mahidhar & Davenport, 2018). Early adopters can scale
2.5.3.2. Theme 6: Growth opportunities with AI implementation. AI can
quickly after the initial adoption phase, especially with their access to
augment or entirely supplant human capabilities within business
abundant data and knowledge engineering skills. Late adopters,

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V. Kumar et al. International Journal of Information Management xxx (xxxx) xxx

however, might find themselves in a never-ending race to catch up, harnesses the information to refine its algorithms and enhance user
where the gap between their abilities and those of the industry leaders experience continually (Burr, 2023). This data-driven approach is
grows wider with each technological breakthrough. Small and bolstered by their commitment to attracting top-tier talent, which is
Medium-Sized Enterprises (SMEs) may be among the late adopters of evident in their innovative AI projects and a workforce comprising some
AI-based marketing strategies due to budget constraints and limited of the best minds in engineering and AI research. Google effectively
access to advanced technology. Along with developing new skill sets to utilizes AI in its marketing efforts, particularly through Google Ads and
tackle the change management that comes with AI integration, the Performance Max (Indacochea, 2021). This feature allows businesses to
challenge goes beyond technology to include cultivating an organiza­ set campaign goals and provide creative assets. Then, it takes over
tional culture that is flexible to AI-driven transformations (Hau, 2023). crafting and executing highly effective ad campaigns across various
In conclusion, the route to AI adoption is complicated, requiring Google platforms tailored to the advertisers’ budgets.
extensive research, strategic planning, and proactive execution. While Overall, despite the risks and difficulties, AI continues to develop and
AI adoption was first regarded with skepticism, the present environment become a crucial game-changer across numerous industries (Pratt,
emphasizes its role in driving business outcomes and creating industry 2023). Early adopters in the marketing realm are now reaping tangible
norms. The message is clear: Proactive adoption and constant adaptation benefits due to the advanced development and accessibility of AI tools,
are not only helpful but also required for future success in the field of AI. including generative AI tools and extensive language models like
Long-term advantages. ChatGPT (Hagerup, 2023). Gartner (2023) predicts that by 2028, 50% of
In terms of long-term impact, research has advanced the notion that businesses will have AI-powered operational, demand, and other types
firms are likely to equip themselves better in delivering AI solutions that of planning in place of time-consuming bottom-up forecasting tech­
encompass all aspects of customer interaction with the firm instead of niques, as AI is expected to offer long-term benefits in improved
being deployed at only specific usage instances often deployed in the decision-making abilities, cost savings, and operational efficiency.
short run (Kumar et al., 2019). In this regard, research has identified that Companies that have been proactive in adopting AI have acquired a
developed market firms’ personalization approach is likely to focus on competitive advantage, while those that postpone or reject this inevi­
(a) strengthening their brand value, (b) incorporating human-machine table transformation risk being left behind in an increasingly AI-driven
interaction as a core feature, and (c) serving customers across varying future. In conclusion, securing a long-term advantage with AI hinges on
profitability levels (rather than focus only on high-profit customers) to adept data management, strategic application, and the trust firms foster
serve as the cornerstones of their marketing strategy (Kumar, 2021). with their audience. More than simply integrating AI techniques and
In the context of marketing, AI’s role as a competitive advantage is algorithms is required to ensure a long-term advantage in the market.
significantly amplified by the underlying data it processes (Shelpuk, Hence, it is proposed that in future for businesses to remain ahead in the
2023). AI serves as the instrument that converts data into insightful AI landscape, they must focus on continuous innovation flexibility and
knowledge, which could be used to improve a company’s offerings uphold ethical standards. More specifically, we propose:
(Fowler, 2020). This enhancement attracts more data and feedback,
Proposition 6a. : Implementing AI-driven marketing strategies can
creating a self-reinforcing cycle where the product’s value amplifies
yield positive outcomes, including improved return on investment (ROI)
with an expanding user base. This evolving cycle not only strengthens a
and enhanced efficiency.
brand’s market position but also establishes a formidable competitive
barrier. (e.g., extensive quantities of data from both customers and Attaining a long-term advantage has always been of interest to
business operations). Nevertheless, accessing such data necessitates businesses (Kuncoro & Suriani, 2018). While short-term gains might be
having a product in the first place. beneficial, a continuous competitive advantage can position a business
Besides data, talent’ and trust are core assets in leveraging AI for a as a market leader, ensuring long-term success. When adopted strate­
competitive edge (Gordon, 2019). In an AI-dominated environment, gically, AI can offer businesses sustainable competitive advantages that
continuous learning becomes the basis of driving a competitive edge for are hard for competitors to replicate. By leveraging AI technologies
enterprises (Kchaou, 2023). The growth of AI brings unanticipated effectively, businesses can achieve significant cost reductions across
competition, perhaps even from previously unrelated industries. Com­ various aspects of their operations, contributing to improved profit­
panies like Apple, Google, and Amazon, primarily renowned as tech­ ability and long-term sustainability. For instance, implementing an
nological companies, have entered the financial services market with AI-powered chatbot for customer inquiries carries potential advantages.
offerings like Apple Card, Google Wallet, and Amazon Lending (Cross, The chatbot, being operational 24/7, can handle multiple queries
2022). This evolution underscores the need for marketing teams to be concurrently, aiding human representatives, reducing wait times, and
agile, adaptive, and continuously innovative. Marketing professionals potentially enhancing customer satisfaction while curbing labor costs.
must not only understand the new power structures shaped by AI but Similarly, AI streamlines marketing tasks like optimizing campaigns,
also actively engage in reshaping their marketing strategies to align with creating content, and supporting customers, cutting down on manual
these emerging trends. The future of marketing will favor those orga­ work and costs. This boosts efficiency, saving businesses money in the
nizations that can quickly adapt to AI-driven changes and embrace long run. This being the case, a deeper investigation will be pivotal for
continuous learning (Manyika & Sneader, 2018). informing future endeavors, hence, we propose:
Trust is the central pillar for successfully achieving a competitive
Proposition 6b. : Adopting AI-driven marketing strategies as opposed
edge, primarily because AI’s efficacy relies on data sharing (Boehm
to traditional approaches can result in substantial cost reductions in the
et al., 2022). Without trust between the company and its customers, the
long-term vs. short-term.
data flow can be restricted, limiting the potential of AI-driven person­
alized and real-time solutions. Trust ensures that consumers are
3. General discussion
comfortable sharing their data and confident in its ethical and secure
handling. This not only facilitates enhanced AI results but also brings
This study highlights the burgeoning and transformative role of AI in
brand loyalty and enduring customer ties (Bhalla, 2020). Consequently,
marketing, emphasizing its exponential growth and integration within
companies that maintain high ethical standards and gain trust are likely
the industry. Grounded in the framework of dynamic capability theory,
to succeed, while those perceived as untrustworthy or unethical face
we delve into the impact of AI on marketing processes, including
significant repercussions.
decision-making, customer experience, operational efficiency, automa­
Google exemplifies a company that successfully integrates AI into its
tion, marketing performance, and the growth opportunities with AI
services and assures its long-term success. With access to extensive data
implementation AI’s remarkable ability to enable organizations to
through various platforms like its search engine and YouTube, Google

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V. Kumar et al. International Journal of Information Management xxx (xxxx) xxx

innovate and enhance operational facets is explored, with an emphasis have significant managerial relevance for industry practitioners.
on the importance of a strategic and deliberate approach to AI integra­ Leveraging insights from a review of academic literature (e.g., Huang &
tion. Through the lens of dynamic capability theory, our analysis dem­ Rust, 2022b; Plangger et al., 2022; Mariani et al., 2023) and the latest
onstrates how AI acts as a catalyst for firms to develop, adapt, and renew developments in AI technology, we provide a list of potential research
their capabilities in response to rapidly changing market environments. topics and consolidate them into six overarching themes. For each theme
Our discussion centers on the transformative impact of AI-driven outlined, we have presented in Table 3 a set of future research questions
marketing capabilities (Kumar, 2021), which we categorize into three aimed at propelling more impactful research. These questions are
main types: analytical, technological, and strategic efficiency capabil­ designed to delve into the complexities and explore uncharted areas
ities. These categories illuminate the ways in which AI can revolutionize within each theme, potentially leading to transformative insights. By
marketing practices. Firstly, analytical marketing capabilities harness examining these questions, researchers and practitioners can broaden
AI’s ability to process and analyze complex datasets, enabling marketers their understanding and advance the dialogue in the expansive realm of
to uncover deep insights and make informed strategic decisions. This AI-powered marketing strategies.
application of AI in dissecting vast amounts of data to guide marketing The first theme examines the impact of AI on decision-making pro­
strategies is pivotal for tailoring approaches to consumer needs and cesses, illustrating how AI-generated customer insights contribute to
market trends. Secondly, technological marketing capabilities leverage more nuanced customer segmentation and personalization, as well as
AI to automate tasks, streamlining efficiency and improving engage­ more seamless relationship management (Taryn, 2023). The role of
ment. Simultaneously, they prioritize ethical considerations, addressing predictive analytics and machine learning algorithms is emphasized,
concerns like data privacy, security, and bias. This dual focus ensures showcasing their utility in steering targeted marketing strategies (van
that marketing strategies not only advance operational goals but also Esch et al., 2021; Mende et al., 2023). Going forward, there is a need to
uphold customer rights and trust, reflecting a commitment to ethical understand better how marketers can integrate and utilize AI-driven
technology use. Lastly, strategic efficiency capabilities highlight AI’s insights to create more effective and competitive marketing offerings
role in refining marketing operations to be more agile and responsive. while simultaneously overcoming the existing limitations of AI.
This involves leveraging AI to quickly adapt to market changes and Theme two examines automated marketing strategies, where mar­
consumer behaviors, ensuring that marketing efforts are both efficient keters use automation tools to streamline complex tasks, allowing for
and effective. better use of marketing budgets and more accurate targeting. Such tar­
Our study significantly enriches the discourse on dynamic capabil­ geting nurtures high-quality leads and frees up resources for strategic
ities (Hunt & Madhavaram, 2020; Kumar et al., 2019; Leemann & work (De Bruyn et al., 2020; Järvinen & Taiminen, 2016). An important
Kanbach, 2022; Matarazzo et al., 2021; Teece, 2020; Weaven et al., consideration here is to investigate how automated strategies, like
2021) by shedding light on AI’s role as a pivotal force in shaping these programmatic advertising and AI-driven conversational tools, can
capabilities within the marketing domain. By addressing a critical gap in personalize the customer experience without compromising privacy.
the literature regarding how dynamic capabilities are operationalized in Additionally, the impact of automation on brand loyalty and customer
today’s digital landscape, specifically in marketing, our research un­ retention is questioned, with a push for research into the long-term
derscores the imperative for businesses to adopt AI to maintain a relationship dynamics between automated marketing and consumer
competitive advantage in a rapidly evolving, tech-centric market. This allegiance.
work not only clarifies the mechanisms through which AI facilitates the Theme three examines how AI, when integrated with extended re­
evolution of marketing capabilities but also signals the strategic value of alities, can significantly enhance customer experiences in real time
integrating AI into marketing strategies for long-term business success. across industries. The instantaneity and the guidance provided by AI-
By examining how AI has been integrated into businesses and aca­ driven technologies streamline the shopping experiences and set new
demic aspects of marketing, we acknowledge AI as a disruptive force standards for customer service across various platforms is still uncertain.
that is moving business practices away from reactive models and toward Additionally, marketers also need guidance on how AI can enable a fluid
predictive ones in key areas of businesses, namely, customer service, and cohesive omnichannel experience for customers.
retailing, marketing, sales, and service integration. Instances like Theme four examines the ethical implications of AI as it becomes
Amazon Prime Air’s drone delivery or Stitch Fix’s personalized shopping increasingly integrated into various industry sectors (e.g., Ettari et al.,
exemplify this shift from conventional to predictive business operations 2022; Mende et al., 2023; Mishra, 2023). Data privacy and security,
(Grandinetti, 2020). Such innovations are not only redefining the algorithmic bias, and discrimination are the focal concerns of AI use.
environment of consumer contacts but are also setting new benchmarks Promising avenues for future research include providing ethical frame­
for operational efficiency. Similarly, RedBalloon’s adoption of Albert for works that can govern the use of AI, strategizing harmonized efforts for
enhanced customer engagement demonstrates AI’s role in harmonizing human-machine collaboration, and how trust can be established to
marketing efforts with sales and service to boost conversion rates. This guarantee equitable and non-discriminatory outcomes for consumers.
evolution in business practices reflects a broader trend where AI is Theme five explores the role of AI in measuring marketing perfor­
increasingly becoming a fundamental force in driving business growth mance, highlighting the depth of insights AI can provide beyond tradi­
and customer satisfaction. tional post-campaign analysis. Marketers would benefit from reliable
Despite the academic world’s keen interest in the role of AI in mar­ and more accurate methods to leverage real-time marketing perfor­
keting, its full potential and ramifications across all marketing roles mance metrics. Additionally, an understanding of the impact of AI-
remain untapped, and scholars are pushing for more in-depth studies to driven metrics on decision-making and strategy development is
comprehend AI’s role in marketing better. This call to action highlights paramount.
the transformation of AI from a future concept to a contemporary reality The last theme focuses on the growth opportunities with AI imple­
that significantly alters marketing tactics and customer behavior, indi­ mentation, exploring the implications of early AI adoption versus long-
cating the necessity for continued research into the industry’s long-term term strategic use. While early adoption of AI can provide immediate
influence. benefits and a competitive edge, it does not guarantee a lasting advan­
tage, and long-term success with AI depends on the strategic use of data,
4. Research agenda continuous learning, and maintaining trust with customers. Due to sig­
nificant initial investment, marketers need more guidance regarding the
To inspire the academic community to produce more impactful financial implications of adopting AI in marketing and what tangible
research in this emerging domain, we developed a research agenda for returns they can expect in both the short and long term. This includes
AI in marketing. Our primary focus was to identify research areas that comprehensive analyses of potential cost savings, efficiency gains, and

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Table 3 Table 3 (continued )

A roadmap for future research on the role of AI in marketing. Research themes What we know about AI What we would like to know
Research themes What we know about AI What we would like to know in marketing
in marketing
• What are the long-term
Theme 1: Aids in • How can AI-driven insights ethical implications of
AI-driven customer (e.g., CRM for customer data collection and anal­
insights 1. the development of segmentation and person­ ysis using AI in marketing?
Rating: 4.37 customer alization) be leveraged to Theme 5: Aids in • How can AI (e.g., AI-
Ranking: 3.70 segmentation and better predict customer Measuring powered analytics tools
personalization purchasing behaviors in marketing 1. deploying marketing and real-time performance
2. the establishment of a varying market performance campaigns tracking) be leveraged to
seamless relationship conditions? Rating: 4.93 2. delivering provide more accurate
management • What are the limitations of Ranking: 3.75 experiences real-time marketing per­
3. the generation of current AI technologies in 3. post-campaign formance metrics?
targeted marketing deriving actionable analysis • What are the challenges in
strategies customer insights, and measuring marketing
how might these be performance using AI, and
overcome? how can these challenges
• How do AI-driven be addressed?
customer insights impact • How does AI-driven mar­
the development and evo­ keting performance mea­
lution of product offerings surement impact decision-
in competitive markets? making and strategy
Theme 2: Aids in • To what extent can development?
Automated automated marketing Theme 6: Aids in • What are the cost− benefit
marketing strategies 1. better use of strategies (e.g., Growth tradeoffs (e.g., early
Rating: 4.10 marketing budgets programmatic advertising, opportunities with 1. assessing the adoption benefits of AI) in
Ranking: 3.65 2. more accurate chatbots, and virtual AI implementation implications of early implementing AI-driven
targeting assistants) personalize Rating: 4.70 AI adoption marketing strategies
3. generating high- customer interactions Ranking: 3.18 2. providing competitive compared to traditional
quality leads without compromising advantage marketing strategies?
4. prioritizing strategic privacy? 3. continuous usage of • How do the costs of
work • How do automated data-driven marketing implementing and
marketing strategies campaigns maintaining AI in
impact long-term brand marketing compare to the
loyalty and customer benefits derived in terms
retention? of ROI?
• What are the key • How can companies
challenges in integrating evaluate the cost-
AI into traditional effectiveness and ROI of AI
marketing strategies, and investments in their mar­
how can these challenges keting strategies for long-
be mitigated? term advantages?
Theme 3: Aids in • How can AI be utilized to
Notes: “Rating” pertains to the average importance score on a seven-point scale,
Enhancing create more interactive
customer 1. extending realities and personalized customer where seven is the most important. “Ranking” pertains to the average impor­
experiences 2. delivering real-time experiences across tance ranking on a six-point scale, where a lower number signifies greater
Rating: 4.20 experiences different industries and importance.
Ranking: 3.60 3. streamlining shopping platforms, such as
experiences Metaverses and spatial
revenue growth opportunities enabled by AI-driven marketing strate­
computing?
• What is the impact of AI (e. gies. Additionally, marketers require clear metrics and benchmarks to
g., in real-time customer evaluate the effectiveness of AI implementations and track ROI over
assistance) on customer time. With proper guidance and insights, marketers can make informed
satisfaction, and how does
decisions about integrating AI technologies into their marketing efforts,
it compare to traditional
customer interaction
maximizing the value of their investments, and achieving sustainable
methods? business growth.
• How can AI contribute to Overall, it has become clear that the intersection of AI and marketing
creating seamless is not just a trend but a paradigm shift, one that requires marketers to be
omnichannel customer
agile, informed, and strategic in their adoption of these powerful tools.
experiences?
Theme 4: Issues that continue to • What ethical frameworks This shift demands businesses to adapt to AI-driven marketing and
Ethical implications receive attention can be developed to actively engage in shaping the process of its evolution. At the current
Rating: 5.28 include: govern the use of AI in stage of AI, success lies in a company’s ability to integrate AI with
Ranking: 3.13 marketing, ensuring human insight and strategic vision. The future of marketing will be
1. data privacy and fairness and transparency?
security • How do the ethical
defined by those who can harness AI’s potential responsibly and crea­
2. algorithmic bias implications (e.g., data tively, ensuring that technology augments rather than replaces the
3. discrimination privacy and security, human touch that remains at the heart of all marketing endeavors.
algorithmic bias and
discrimination) of AI affect
5. Practical implications
consumer trust, and what
measures can be taken to
build and maintain this Although AI adoption in marketing has aided businesses in
trust? enhancing customer experience and increasing brand awareness,
quantifying these metrics remains a challenging endeavor. Conse­
quently, this leads to a fundamental question: How can we convincingly

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V. Kumar et al. International Journal of Information Management xxx (xxxx) xxx

advocate for the adoption of AI in marketing practices? To address this, Table 4

managers must focus on a blend of qualitative and quantitative evidence Application examples of AI being used for different marketing activities.
when exploring AI’s impact. This can include case studies showing clear Themes Subdimensions Use Cases
before-and-after comparisons of AI implementation alongside metrics
AI-driven customer Predictive analytics AT&T and Verizon use AI-driven
such as improved customer engagement rates, increased conversion insights predictive analytics to forecast
rates, and enhanced efficiency in marketing operations. Emphasizing customer churn by analyzing
AI’s ability to analyze vast datasets for insights that drive targeted customer data, usage patterns,
marketing strategies can also be persuasive. Additionally, discussing and sentiment. Additionally,
these telecom giants leverage AI
AI’s role in providing a competitive edge and its scalability to adapt to predictive analytics for network
evolving market trends can further solidify the argument for its inte­ optimization and proactively
gration into marketing strategies. anticipating service challenges,
For example, Domino’s Pizza is a simple yet interesting example of resulting in improved customer
experiences.
addressing the challenge of advocating for AI in marketing practices.
Customer Uber uses AI algorithms to
Domino’s Pizza effectively demonstrates AI’s role in marketing through segmentation and segment customers and offer
enhanced order and delivery processes (Garg, 2023). Their use of AI for personalization personalized promotions,
early pizza preparation and route optimization exemplifies operational discounts, and ride
efficiency and customer experience improvement. Additionally, Coca-­ recommendations. By analyzing
a user’s ride history, location,
Cola’s vending machines incorporate AI to enhance the customer and preferences, Uber can
experience. These machines, equipped with AI, offer personalized propose popular destinations,
product recommendations and promotions tailored to the specific nearby dining options, and
location and customer preferences (Rahman, 2019). This not only im­ convenient pickup locations.
This results in enhanced user
proves the vending experience but also provides Coca-Cola with valu­
engagement and an enriched and
able consumer data, further refining its marketing and product informed experience with the
placement strategies. Both Domino’s and Coca-Cola’s innovative use of service.
AI showcases its potential to transform customer interactions and a Automated Marketing Programmatic Google employs AI-powered
better brand experience. These instances exemplify the innovative and Strategies advertising Smart Bidding to optimize ad
campaigns. Advertisers set ad
useful application of AI in marketing, showcasing how the technology
campaign objectives, and AI
can significantly enhance marketing strategies and initiatives. Table 4 algorithms dynamically adapt
presents some use cases of AI’s role in marketing operations. bids for optimal results. Google
To determine the practical importance of each identified marketing also harnesses AI for accurate
audience targeting and ad
theme and to complement our literature review, we surveyed 40 mar­
relevance, improving click-
keting professionals in companies actively implementing or considering through rates and ensuring that
AI in their marketing strategies. Survey respondents were asked to rate ads are shown to the most
how important AI is to each marketing theme regarding their business appropriate audience, enhancing
performance (1 = Not important at all, 7 = Extremely important). Re­ overall ad quality and
engagement.
spondents were provided with a brief description of each theme. The
AI driven Chatbots Amtrak’s virtual assistant
themes were presented separately and were randomized across re­ and virtual assistants streamlines ticket booking by
spondents to mitigate primacy and recency effects. Next, all themes were allowing users to conveniently
presented on a single screen, and respondents were asked to rank the search schedules, check ticket
availability, and make
themes in terms of their importance as we advance into the era of AI
reservations. Furthermore,
marketing, with 1 being the most important and 6 being the least chatbots offer 24/7 customer
important. The six themes were presented in a randomized manner. The support and immediate response
mean scores for ratings ranged from 4.10 to 5.28, while the rankings to common queries, enhancing
ranged from 3.13 to 3.75 (see Fig. 1 and Table 3). the passengers’ overall
experience.
The survey findings indicate a diverse range of importance and pri­
Enhancing Customer Extended Realities Companies like Meta and
orities assigned to each theme. The theme with the highest rating was Experience and Spatial NVIDIA leverage AI for diverse
"Ethical Implications," scoring 5.28, which suggests a significant Computing applications, such as facial
emphasis on the ethical considerations of AI in marketing. As companies recognition, voice and speech
recognition, and image
increasingly adopt AI technologies for their numerous benefits, man­
recognition, to create immersive
agers acknowledge the potential harm AI systems can cause, such as experiences. In the case of social
perpetuating biases, infringing on privacy, or making erroneous de­ VR environments such as Meta
cisions. This concern becomes more pronounced as governments and Horizon, AI-powered avatars use
regulatory bodies scrutinize AI technologies and enact legislation to natural language processing and
emotion recognition to make
ensure their responsible use. Moreover, customers, investors, and
interactions more human-like.
stakeholders expect firms to adhere to ethical standards to alleviate fears The generative adversarial
and skepticism surrounding AI, fostering greater acceptance and inte­ networks allow NIVIDA to apply
gration into society. In contrast, "Measuring Marketing Performance," synthesized high-quality images
while rated as highly important, had less of a priority among the pro­ and textures to 3D models for VR
and AR applications.
fessionals. This indicates a significant emphasis on the ethical aspects of Real-time customer Salesforce’s Einstein AI analyzes
AI in marketing and suggests a potential area for future research and assistance customer behavior, preferences,
focus while recognizing the value of performance measurement in the and interaction history data in
field. real time and automatically
directs customers to the most
Themes such as “AI-driven Customer Insights,” “Automated Mar­
suitable agents, considering
keting Strategies,” and “Enhancing Customer Experiences” received their expertise and availability.
moderate importance ratings (4.37, 4.10, and 4.20, respectively). This (continued on next page)
suggests a balanced acknowledgment of their significance in AI-driven

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Table 4 (continued ) Table 4 (continued )

Themes Subdimensions Use Cases Themes Subdimensions Use Cases

Additionally, it provides agents labor and costs while

with recommended responses for simultaneously enhancing
efficient customer support. resource allocation and
Ethical Implications Data Privacy and Sift employs AI-driven biometric operational efficiency. This
Security authentication methods, such as strategic adoption of AI allows
facial recognition, fingerprint the airline to offer competitive
scanning, and voice recognition, prices and deliver dependable,
to help safeguard against data enhanced services. DeepMind,
breaches and mitigate on the other hand, leverages AI
unauthorized access. to process vast amounts of
Furthermore, it also analyses healthcare data, expedite
user behavior patterns to detect innovation, assist in disease
anomalies that may indicate diagnosis, optimize patient care,
fraudulent activity. and predict patient
Algorithmic Bias and Accenture has developed AI- deterioration. Garmin uses AI to
Discrimination driven tools that assess AI assist individuals in health
models for bias and monitoring, offering valuable
discrimination, identifying insights and suggestions for
disparities in predictions across long-term well-being.
demographics. They also
provide metrics and measures
for quantifying model fairness, marketing, albeit not as top priorities compared to ethical implications.
enabling comparisons across This underscores managers’ understanding of the importance of
groups. Pymetrics, on the other
hand, uses neuroscience-based
responsible AI implementation for long-term organizational success and
AI algorithms to match job sustainability. However, they exercise caution, prioritizing a compre­
seekers with positions that best hensive understanding of risks, ROI assessment, and addressing
fit their cognitive and emotional employee concerns before full implementation. Interestingly, "Growth
strengths rather than
opportunities with AI implementation" had a relatively high rating of
demographic factors.
Measuring Marketing AI-powered Hilton employs IBM Watson (a 4.70 and ranked second, reflecting that managers are aware of both the
Performance analytics tools suite of AI-powered immediate benefits and long-term advantages of AI adoption. Hence,
technologies) for an AI-powered future researchers can play a valuable role in supporting managers who
concierge service that offers are cautiously implementing AI technologies by (1) developing decision
individualized
recommendations to guests
support tools and models to assist managers in evaluating the costs,
through in-room devices. By benefits, and risks of AI implementation, (2) helping employees transi­
analyzing guest preferences, tion to new roles and responsibilities by identifying the skills and
Watson empowers Hilton to fine- competencies needed to work effectively with AI systems, and (3)
tune room amenities and
developing methods and tools that can help managers track key per­
services to cater to each visitor’s
unique preferences. In addition, formance indicators, assess the impact of AI technologies on business
Hilton leverages Watson’s outcomes, and identify areas for improvement and optimization.
insights to drive data-informed As the integration of AI into business systems becomes increasingly
decision-making, influencing prevalent, there is a growing divide among firms regarding its effec­
marketing, pricing, and resource
allocation based on market
tiveness (Bankins et al., 2023). In light of this, we advocate for a
trends and customer behavior. nuanced approach among managers. Rather than adopting a blanket
Real-time Tableau utilizes natural stance on AI, managers should conduct a thorough analysis to determine
performance language processing (NLP) for its potential impact on their specific business operations. Managers can
tracking user-friendly data inquiries with
prioritize AI implementation by identifying areas within marketing
real-time visualizations. The
platform offers AI-powered operations for streamlined processes and improved outcomes. For
connectors for real-time data example, customer insights exemplify this, where AI has yielded
integration, while AI-driven data tangible benefits as it empowers marketers by understanding behaviors,
alerts promptly notify users of anticipating needs, and optimizing strategies, thereby revolutionizing
significant data changes,
enabling timely responses.
marketing with tailored experiences and predictive capabilities.
Growth opportunities Early adoption Tesla’s early integration of AI to Despite lingering questions regarding the ethical implications of AI
with AI benefits advance autonomous driving and managers’ hesitancy to fully integrate it into marketing operations,
implementation capabilities set them apart as reflected in our survey results, managers can address these concerns
within the automotive sector.
by prioritizing data quality, collection, and management. This ensures
The Autopilot and Full Self-
Driving (FSD) systems heavily that AI algorithms have access to accurate and relevant information,
rely on AI models, which enabling them to generate meaningful insights and drive effective
continue to advance due to the marketing strategies. By investing in robust data practices, managers
rich data gathered from real- can enhance the trustworthiness and reliability of AI-driven decision-
world driving scenarios. Their
emphasis on AI has not only
making processes, ultimately fostering greater confidence in the inte­
improved safety but also gration of AI within their marketing operations. Moreover, firms should
heightened convenience, prioritize transparency, fairness, and accountability in AI implementa­
establishing them as an industry tion. This includes transparently disclosing AI usage, ensuring fairness in
leader.
algorithm design, and establishing clear accountability structures.
Long term benefits Delta Air leverages AI to
automate time-consuming tasks, Additionally, managers should be open to investing in robust AI-
resulting in reduced human powered analytics tools and platforms. By investing in reliable AI
technologies, managers can position their organizations for greater

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V. Kumar et al. International Journal of Information Management xxx (xxxx) xxx

agility, innovation, and competitiveness in the market. (Article) Technological Forecasting and Social Change, 180, Article 121711. https://
doi.org/10.1016/j.techfore.2022.121711.
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