‘There’s a talent crisis’: Are smaller agencies behind in the AI race?

Smaller ad agencies may be struggling to adopt AI quickly and effectively as competitive pressure mounts.

A new study by AI Digital Labs — the strategy arm of AI-focused programmatic consultancy AI Digital — surveyed over 50 executives from small-to-medium-sized agencies with fewer than 200 employees.

The results, published last month, showed that 66% of respondents remain stuck in the experimentation or discussion phase of AI, despite acknowledging its importance to staying competitive.

Further, 57% admitted that they have only “talking points but nothing unique” to differentiate their agency when it comes to AI.

“There’s a clear spectrum of maturity and what people embellish for marketing speak,” David Mainiero, AI Digital’s chief AI officer who led the research, told The Current in an interview. “Frankly, most are behind.”

The report, titled “The State of AI Maturity,” also found that nearly half of respondents said they “don’t measure yet” AI’s value for their agency.

“For those trying to step out of ‘pilot purgatory,’ they can’t tell me why they are investing in AI tools,” Mainiero said. “They don’t measure yet, or they’re measuring efficiency. That makes sense for a large tech company. It doesn’t make sense for a small agency to try to save 10 hours a year.”

Agencies are feeling the urgency to get the most out of AI at a time when the tech is quickly reshaping the advertising landscape.

“If you’re a traditional people-oriented company, regardless of the industry, you need to reexamine things,” John Kahan, chief AI officer at Stagwell, previously told The Current. “Those that have AI will win in the new world, and those that don’t will be left behind.”

The survey results were released soon after Omnicom completed its acquisition of Interpublic Group, which strengthened the combined company’s AI prowess.

It further underscores how larger agencies and holding companies may have an advantage.

But their size could also be to smaller agencies’ advantage.

“As a small, independent agency, o2kl has always benefited from being nimble, with less bureaucracy and faster decision-making than larger, publicly traded organizations,” said Tracey Owens, co-founder and president of o2kl. “AI has amplified that advantage, enabling us to do more with less while maintaining a high standard of strategic and creative output.”

Owens added that the agency is moving beyond experimentation into a “phase of measured, intentional adoption.”

“Alongside ongoing exploration, we’re building structure through training programs, documented workflows and defined use cases by discipline,” she added.

Mainiero also expressed optimism, despite the report’s findings: “Smaller agencies are feeling the AI pressure … and pressure makes diamonds.”

Mainiero cautioned that even if holdcos participated in the survey, it might suggest that they are further along in AI adoption — but that wouldn’t necessarily mean they’re seeing tangible results: “They’re able to answer that they are building the tools. But is that building their business?”

Ultimately, the biggest barrier for smaller agencies surveyed isn’t cost or resources — it’s people. Over 60% of respondents cited a “skills gap” and “training needs” as the primary barrier to AI adoption.

“There’s a talent crisis,” Mainiero said. “Courses aren’t mandatory or aren’t contextualized to the work people do within the agency.”

“AI is a human leadership challenge, not a tech challenge. You can’t fake this; there’s no shortcut to building a long-term strategy.”