In 2024, BMW invited art lovers to engage with its 8 Series Gran Coupé through a generative AI-powered campaign that curated visuals in real time based on users’ interests. By relying on social listening algorithms and targeting niche communities, BMW delivered 23% higher engagement per dollar spent compared to traditional campaigns. This wasn’t just about art or cars, it was about the dawn of AI-driven brand storytelling.
Experiential marketing, long defined by flashy kiosks and selfie booths, has entered a new epoch. Artificial Intelligence (AI) has quietly and rapidly moved from a “backend” tool to the frontlines of marketing strategy, personalising experiences at scale, automating decision-making in real time, and converting once-passive engagements into immersive brand journeys.
“Earlier, it was all about touchscreens or cute selfie stations. Today, AR, VR, AI, and spatial computing aren’t accessories anymore. They are the experience,” Sindhu Biswal, CEO and Founder of Buzzlab, told financialexpress.com. “The big shift is data. We’re no longer guessing what clicks. We’re reading facial cues, tracking dwell time, and analysing emotion. The tech has gone from sideshow to stage.”
AI today is doing what experiential marketing has always strived for. It’s making people feel something, but now at a scale and precision that was unimaginable a few years ago.
Take Nike’s House of Innovation, where store layouts and offers change in real time based on customer profiles. Or PepsiCo’s Times Square activation, where computer vision-modified light, scent, and sound were adjusted 14 times per minute based on crowd mood, resulting in a 213% surge in social shares.
“AI is transforming experiential marketing by converting passive experiences into tailored journeys,” said Vinayak Aggarwal, CEO of BiteSpeed. “Whether it’s predictive models or immersive channels like WhatsApp and Instagram, it’s all about intelligent, responsive connection.”
“AI powers immersive, intelligent and emotionally resonant experiences,” Snehil Gautam, Chief Growth & Marketing Officer at Housing.com and PropTiger.com, commented. “Our virtual site visits, AI-based recommender engines, and 3D walkthroughs don’t just show homes, they show lifestyles, customised to a user’s aspirations.”
The operational efficiencies are equally compelling. AI-powered bidding systems now reduce customer acquisition costs by up to 34%, while generative tools slash content creation costs by 40–60%. Starbucks’ Deep Brew, for instance, not only reduced menu design costs by 31% but also boosted average order values through hyper-personalised upselling.
Hyper-personalisation is no longer a buzzword, it’s a baseline. “AI isn’t just enabling personalisation, it’s turning it into a superpower,” Biswal said. “In the old world, personalisation meant your name on a Coke bottle. Now, two people walk into a kiosk and walk out with entirely different experiences, offers, content, products, crafted just for them.”
According to a recent report, major experiential campaigns now generate 2.7 petabytes of data annually. Advanced neural networks parse this deluge to drive 89% accuracy in participation forecasting, enabling dynamic changes in lighting, music, and even product displays based on foot traffic or emotional cues.
“At Housing.com, our AI tools match users with homes not just based on price or size, but commute preferences, lifestyle patterns, and even natural light requirements,” Gautam added. “That’s hyper-personalisation at work.”
“With AI, marketing has become very personal and interactive,” said Manas Godha, Growth and solutions consultant, Advaiya. “Peripheral automation allows brands to integrate AI-driven experiences with existing systems to unlock new levels of responsiveness and impact, without costly core changes.”
Campaigns that feel like conversations
It’s this ability to create deeply personal, even emotional moments that separates successful AI-led campaigns from cold, automated ones. Cadbury’s “Not Just a Cadbury Ad”, which generated customised Diwali videos starring Shah Rukh Khan for thousands of kirana stores, is often cited as a case in point.
“AI doesn’t just automate, it amplifies,” Raghav Bagai, Co-founder of SW Network, said. “It makes one message feel like a million. And when it’s rooted in emotion and context, that’s where the magic lies.”
Experiential AI also enables interactive storytelling. Proto Hologram’s multilingual AI avatars at CES 2025 changed exhibit suggestions mid-conversation based on attendees’ gaze and tone, increasing dwell time by 41%. At the same time, brands like Under Armour are using avatar tech to deliver custom workout holograms based on social data.
“Drawing insights from the banking industry, AI is boosting emotionally resonant experiences,” said Saket Newaskar, Director at Expleo. “Tools like AR for financial goal visualisation or real-time campaign adjustments are not just about engagement—they build trust through intuition and relevance.”
The tech stack that powers the magic
Machine Learning drives the predictive core, sifting through behaviour patterns to adapt experiences in real time. Computer Vision powers virtual try-ons and gesture-based navigation. Natural Language Processing (NLP) enables responsive, multilingual brand conversations. Augmented and Virtual Reality remain the showstoppers, turning booths into full-blown storyscapes.
“The combination of these technologies creates fluid, evolving, user-specific experiences,” Meher Patel, founder of Hector, explained. “From Myntra’s MyFashionGPT to Asian Paints’ mood-sensing colour recommendations, the synergy of AI with immersive tech transforms transactions into connections.”
Balancing automation with emotion
Still, over-automation carries risks. “AI can calculate, but it cannot feel,” Biswal warned. “Over-personalise and it gets creepy. Rely too much on algorithms, and everything starts to feel sterile, soulless.”
Bagai echoed this sentiment: “The sweet spot is when AI supports the idea, not replaces it. AI should enable stories, not write them.” Gautam too flagged the importance of balance: “Too much automation can erode the human touch. Data privacy, algorithmic bias, and emotionally flat interactions are very real risks. The real impact comes when AI precision is paired with authentic, human storytelling.”
The skill gaps and the road ahead
The rapid evolution has created a capability vacuum. Reports suggest that 78% of consumers globally express concern about AI data usage, pushing brands to adopt federated learning (which keeps data on devices) and dynamic consent platforms.
Marketers are also increasingly expected to navigate regulation. From the EU’s AI Act and California’s Emotional Privacy Act, to India’s very own and latest DPDP Act, AI use in public-facing campaigns now demands transparency, consent management, and fairness testing. Brands like Coca-Cola and Sephora have responded with algorithmic fairness protocols and region-specific AI implementations.
The future is invisible, adaptive, and human
Experiential marketing has always been hard to measure. AI changes that. Brands can now attribute ROI not just to footfall or impressions, but to biometric engagement, dwell time, and adaptive conversions. But the bigger story is this: AI is turning experiential from an art into a science.
It’s not that human creativity is being replaced, far from it. But the brands winning in this new paradigm are the ones where the storytelling is still led by humans, even as the delivery is powered by code. As Patel put it, “The best experiences happen when the tech fades, and the emotion shines.”
“AI is a powerful tool,” Bagai said. “But the story still needs a storyteller.”