Is Ad Tech Being Haunted by The Ghost of Ad-tech Past?
Being an ad tech startup these days comes with a ton of hurdles. Over the past 10 years, startups in the ad tech space approached brands with delusions of grandeur, over promising and under delivering.
If you’re a new ad tech startup, this decade of often missed expectations, has created an environment where it is almost impossible to survive, especially if you’re company is bootstrapped. It’s not just that today’s ad tech companies are being held more accountable for marketing ROI, proof of concept to even get a meeting, and the requirement to exhibit an extremely unique and innovative idea. It’s that VP and directors at agencies and brands have become so overwhelmed and immune to these startups that getting meetings sometimes feels like winning Olympic gold.
To some degree, I cannot blame the agency or CMO. The barrier to entry to be in online advertising was, at one point, so low that almost anyone could serve an ad by turning on their computer and dedicate a server to push a lightweight image. People could then claim technological expertise and targeting efficiency because it is nearly impossible to discover your ad across the web. There was too much faith given by the marketer or agency to networks and digital technology startups because agencies and marketers are not traditionally technologists. This trust was often abused when advertising performance didn’t live up to the hype of the pitch.
The result is that marketers are becoming much more creative at finding potential partners.
Brands and agencies are forming partnerships through tech accelerator programs (boot camps for startups), creating innovation labs where they can mold technology at early stages, and launching pitch competitions where startups get a chance to present in front of marketers. For example, I observed a pitch competition that a brand held, where the startups had a month to put together a custom pitch to stand out. It was awesome… unique… different… solved a problem… everything you could want for a marketer. The next steps were to potentially work with that brand. Not a contract. Not a deal. All that heart soul, time, expectations, anticipation, long nights, pizza, working of the network, and well… “Great Job… you were in front of 15 C-Level Execs”.
In addition, marketers are putting these innovative technologies and businesses (startups) through much more rigorous sales cycles (some that last years just to get on a sales cycle), complete with custom presentations without follow ups (remember the expression “buying on yahoo won’t get you fired.”?), and requests for free labor and work to build a proof of concept specific to that company.
While this is all great and helpful for vetting, the result for marketers is that they are not striking while the iron is hot. These methods simply are not scalable. This is also unfortunate because it could impede the next Google or Facebook from happening (I am pretty sure that Facebook and Google didn’t go through pitch competitions), and also because the role of a marketer is to experiment, test things out, and find unique ways to capture an audience’s attention. Testing these new businesses and technologies does not mean that you have to have a hunch that it will work out. Startups these days are tied to strict expectations on ROI and proof through analytics… more than ever before.
Here are some ways that marketers can better work with today’s start-ups:
Help direct and mature startups as they have a lot to learn and well… you won’t have to deal with bad best practices that drive you nuts today.
Invest in these startups: use your marketing dollars to invest and create the future. Asking for gratis work only hurts the company and will potentially put them out of business (which doesn’t do anyone justice when the solution works).
Please stop saying “we are all planned out for the year, but thanks for the time.” If things don’t work as planned (pun intended), have a partners in place to complete your goals.
Today’s crop of ad tech companies are different and better than those of the past. For one, data has had a large impact on the advertising industry. We have the ability to measure ad campaigns in so many different ways that it requires us to be accountable and transparent. The startup community is bigger than ever and marketers have the ability to use this to their advantage in a positive way that can build their future as well. This isn’t the time to exploit the labor, the findings, and the innovation of companies; it is the time to reinforce change and ride the wave so that everyone wins.