This paper explores how advertisers in Iraq are employing artificial intelligence (AI) applications to create more targeted, impactful digital advertising campaigns. The study is intended to examine the knowledge and utilization of AI applications and adopted implications among advertising practitioners and uncover the barriers, limitations towards effective assimilation. Using a mixed method to collect the data, the study utilized a structured questionnaire to 115 advertising agencies and digital marketing firms professionals in Baghdad, and interviews-campaign managers to gather the qualitative information. The findings show a high degree of awareness, and growing trust, in AI technologies like content generation, audience targeting, chatbots and data analytics. Many respondents believe that AI is effective in enhancing campaign outcomes and customer experiences, yet concerns remain around control, technical skills, data privacy and cost. It provides empirical insights for localized adoption of AI in advertising to provide actionable solutions and serves as a steppingstone to future work in the establishment of digital economies.