Generative artificial intelligence is an emerging paradigm taking over businesses. While all the organizational functions are leveraging this captivating new technology, marketers in particular are using this breakthrough innovation to transform marketing practice and understand consumer behavior. Generative artificial intelligence systems, such as ChatGPT, use deep learning models to autonomously produce textual or graphical materials in response to instructions or queries. With substantial training on datasets, generative artificial intelligence acquires knowledge from fresh input and exhibits fundamental comprehension, producing human-like, context-specific and nuanced insights. Broadly, generative artificial intelligence is used in the creation of marketing content and the generation of market and consumer insights. In this chapter, we discuss the application domains of generative artificial intelligence in marketing, such as customer engagement, customer service, customer experiences, content creation, personalization and lead generation. We also examine how generative artificial intelligence can help marketers understand consumer behavior by analyzing customer data to produce insights and develop effective marketing strategies. However, this captivating technology also brings challenges, including ethical considerations and policy implications, which should not be ignored. Businesses need to ensure data protection, transparency and prevent consumers from exposure to manipulation, bias and stereotyping as a result of AI-created content. The chapter provides a conceptual understanding of generative artificial intelligence technology, its applications and adoption in marketing, as well as its potential and challenges, while addressing its ethical use and policy considerations.