Duda has published the 2024 AI Outlook for Digital Agency Leaders report. The report looks at how AI, and specifically generative AI, is changing how digital agencies are working and what their investment intentions are. The report is supported by a blog written by Santi Clarke, Director or Content & Communication at Duda.
Digital Agencies are riding the hype wave and have become the early adopters of AI. Digital Agencies have been quick to adopt AI, with 100% of agency owners already using AI in their web-building processes.
The report begins with five key findings:
- Fear of missing out drove agency owners to adopt AI, but there are concerns about keeping up to date with the technology
- AI is a game-changer
- AI is already yielding positive results for agencies
- Owners expect to increase savings from AI by 134%
- Investment in 2024 will focus on content, whether that is content strategy (40%), editing assistance on content (29%) or creating content (imagery -32% and written 26%)
The report itself has a mix of narrative around the data points and data visualisation which do add value. However, there is no qualitative element to the survey and little analysis within the report or quotes from thought leaders to add colour. The authors did provide additional information, notably about the launch of technology tools around AI.
The report is based on a relatively small sample of 200 digital agency owners that offer web design or development as part of their services. Respondents came from a mix of countries, including the UK, the US, Canada, France, Germany, Italy, Spain and the Netherlands. The report was conducted by Global Surveyz Research. Around half of the respondents were based in the US, which means the results are biased towards that geography. The authors have not separated out data for the smaller samples.
Itai Sadan, Duda CEO, commented, “The rapid advancement of AI in marketing has already reshaped digital agency operations. In 2023, agencies faced inflation, pricing pressures, and challenges around hiring top talent, leading to tighter margins. It’s now essential for businesses, particularly agencies, to embrace AI as a strategic necessity – not just a tool – to optimize operations and stay competitive.”
AI is enabling organisations to scale faster (89%) and create content faster. The first will enable agencies to target smaller clients. However, while the report indicates that it will help with content, it did not dive into its limitations. Something that is becoming a recurring theme at the moment with the deprecation of ChatGPT.
Agencies are using generative AI (ChatGPT is the most popular) and are getting good results when updating existing client pages (59%), generating content for new web pages (55%), and creating new images (53%). Only 40% are using it to optimise SEO, and only 12% for generating code, 53% plan to do so in 2024.
When measuring success 32% are measuring cost savings. But only 21% are measuring the return on investment, which is an odd discrepancy. The average amount of savings achieved will increase in 2024. However, for larger agencies, this is still only $25,000 of annual savings in 2024. It is not yet a game changer that will allow organisations to reduce headcount significantly, is the inference.
The longer-term benefits include scaling faster and greater ability to personalise and process improvements.
Enterprise Times: What does this mean
This is a fascinating study of how agencies have rushed to implement AI within their business with some success. However, it does not look at the technology in detail and whether organisations are considering the use of private LLMs.
It does, however, demonstrate that FOMO led organisations to invest in AI. Even though only around a fifth have calculated the ROI of their investment. With the ethical and compliance issues surrounding AI now starting to catch up, an area lightly covered in the report with data privacy concerns for 30%, IP for 20% and ethical concerns for only 17%, firms have leapt into the new technology but created a risk for their business. It will be interesting to see how these challenges manifest in the 2025 report and what the legislative landscape looks like next year.