With the advancement of digitalization, artificial intelligence (AI) has become a key factor in providing competitive advantage in digital marketing and advertising. This study aims to examine the effects of integrating AI technologies into digital marketing on businesses and consumer behavior. A qualitative research approach was adopted, and a literature review method was used by systematically examining recent academic studies. The study focuses on the roles of generative AI in content creation, search engine optimization (SEO), programmatic advertising, and customer journey management. Findings indicate that AI-supported marketing practices enhance campaign effectiveness through personalization, predictive analytics, and automation, while positively influencing customer satisfaction, purchasing behavior, brand image, and brand loyalty. Overall, the study concludes that AI is not only an operational tool but also a strategic and sustainable competitive factor in digital marketing, highlighting the importance of its use within ethical principles and human–AI collaboration.