Marketers are still wrapping their heads (and their strategies) around generative AI, but 2024 is poised to be a (another) year of revolutionary change, and new research from agency-focused website builder Duda offers analysis of AI usage by owners of digital agencies specializing in web design and development, sharing insights into the disruptive year we’ve been through, as well as highlighting the technology’s business impact in 2023 and anticipated investments in AI for the year ahead.
According to the firm’s 2024 AI Outlook for Digital Agency Leaders report, there is a strong sense of optimism for the next 12 months as agencies anticipate a significant increase in cost savings due to AI, and a commitment to investing in AI in the coming year.
Areas where digital agencies are already seeing results from AI:
Key findings include:
Agency owners expect their AI-driven savings to increase by 134 percent year over year
Agencies prioritize cost savings (operational efficiency, including faster turnarounds and reduced costs) as the leading metric for AI success, a focus for 32 percent of agencies. Projections for 2024 indicate an average annual savings increase of 134 percent from AI across all agency sizes—suggesting that agencies expect a substantial improvement in their financial efficiency due to AI integration.
Notably, 25 percent of large agencies (100+ employees) anticipate over $25,000 in savings in 2024, a tenfold increase from the number of large agencies reporting a similar range of savings in 2023. Though the use of AI was emerging in 2023, 90 percent of agencies already reported savings of up to $10,000, with 33 percent of larger agencies surpassing the $10,000 savings mark.
Top metrics used to measure successful AI implementation:
When it comes to 2024 AI spend, content is (still) king
The findings reveal a surge in planned AI investment for 2024, covering tool costs, training, consulting fees, and more. Over half of agencies (53 percent) plan to invest between $5,000 and $10,000 in AI in 2024, with 24 percent considering investments between $10,000 and $25,000. Notably, 50 percent of large agencies are preparing for significant AI adoption, aiming for allocations of $10,000 to $25,000, indicating a more proactive approach compared to smaller agencies.
Content-related AI capabilities are a major focus, with content strategy (40 percent), content editing (29 percent), and content writing (26 percent) ranking as the top three out of five investment priorities.
Beyond AI-driven annual savings and future investment, the researchers asked agencies for their sentiments on the most valuable current AI tools, how they are leveraging AI for specific client services, where they believe AI will improve their agency capabilities, and more.
Where agency owners expect AI to improve their business:
Other key findings include:
The fear of missing out is real, driving widespread AI adoption
While 100 percent of agency owners surveyed are already using AI and seeing savings from AI-driven efficiencies, there is still concern about keeping pace with AI developments in 2024 as the digital landscape evolves: 84 percent of agencies express concern about keeping pace with AI developments in 2024, with 58 percent being slightly concerned and 26 percent being very concerned. Only 16 percent of agency owners remain unworried.
Agency owners expect AI to transform how they do business
In 2024, a majority of agency owners anticipate AI will significantly optimize workflows and speed up content creation, aligning with survey insights on 2024 primary focus areas of AI investment: 89 percent expect AI to accelerate business scaling, 87 percent to streamline time-consuming tasks, such as content creation, and 86 percent believe it will aid in client acquisition, expanding their total addressable market (TAM). However, opinions vary on AI’s impact on high-level business decision-making—such as strategy and client management—with 24 percent (almost 1 in 5) doubting its effectiveness in this area for 2024.
Top risks and challenges agencies face when implementing AI:
AI already yields positive results for digital agencies and their clients
Digital agencies report the most positive outcomes from AI usage in areas such as updating existing content (59 percent) and content generation (55 percent). The top AI tools of 2023 include ChatGPT (53 percent), DALL-E (47 percent), and Bard (43 percent). Although 53 percent of agencies are using AI for SEO optimization, they have not yet seen significant results in 2023.
“The rapid advancement of AI in marketing has already reshaped digital agency operations,” said Itai Sadan, Duda CEO, in a news release. “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.”
Additional findings from the report include:
- AI integration challenges emerge in agencies: 35 percent of agencies grapple with scalability issues, struggling to efficiently expand AI capabilities. For 30 percent, data privacy—protecting sensitive information within AI systems—is a key concern. Moreover, 29 percent encounter difficulties integrating AI into their existing systems, a process frequently complicated by the use of third-party tools.
- Minimal concern among agencies about AI’s impact on creativity: Only 15 percent are concerned about AI leading to reduced work quality, only 13 percent fear a loss of creativity, and just 9 percent worry about client awareness of AI.
- Diverse AI success metrics: Agencies measure AI implementation success using varied metrics. They prioritize cost savings (32 percent) as the top indicator of success, followed by operational efficiency (26 percent) and client satisfaction (25 percent). Larger agencies assess customer retention to measure successful AI implementation, while medium and smaller agencies focus on ROI and operational efficiency, respectively.
- Reinvestment in AI extends beyond content strategy for 2024: As agencies plan to reinvest their 2023 savings in AI, 35 percent are prioritizing personalization for delivering bespoke content at scale. Meanwhile, 32 percent will focus on AI for efficient image creation, and 26 percent are gearing up to invest in AI-assisted SEO.
- Other sectors lag behind in 2024 AI investment: Code generation, UX/UI design, and translation/localization, which involve adapting content for various regions and languages, are receiving less investment focus in 2024.
- Rising interest in AI for code generation: Over half of agencies (53 percent) ]show a growing interest in exploring using AI for code generation in 2024.
Download the full report here.
The report’s findings are based on the analysis of responses from 200 owners of small (2-10 employees), medium (10-100 employees), and large-sized digital agencies (100+ employees) across the US, Canada, UK, Australia, France, Germany, Italy, Spain, and the Netherlands.
