Brands Engage Startups Primarily for Social Media and Content Development

Major marketers turn to startups for a wide range of activities involving technology, but according to a new study, the most prevalent assignments are for social media and content development and management.

 The study, “Brands Working with Startups,” was conducted by the ANA (Association of National Advertisers) in conjunction with the Consumer Technology Association, formerly the Consumer Electronics Association(CEA), and was designed to explore marketers’ perceptions, attitudes, and behaviors toward hiring startup companies.

 Specifically, the study examined how marketers work with startups, their approach to using them, the activities associated with startups, and the pros and cons of hiring such companies.

 “Marketers clearly take a serious approach to engaging with startups, and this survey takes a deep dive into exploring the nuances of those relationships,” said ANA President and CEO Bob Liodice. “It examines and reveals not only how but why advertisers turn to startups, and what they expect of them.”

 The study, which included both business-to-business and business-to-consumer marketers, also revealed the following:

•     Overall, marketers engage with startups to leverage up-and-coming technology, stay ahead of trends, drive innovation, and gain competitive advantage at a reasonable cost.
•     Advertisers hire startups for a wide range of activities related to marketing and advertising, but the most prevalent activities were for social media (53 percent) and content development and management (49 percent). Other leading projects included research and analytics (45 percent), mobile advertising (43 percent), and marketing automation (39 percent).
•     Although startups are used almost exclusively for technology solutions, respondents indicated they are not buying technology — rather, they’re buying solutions to business problems.Marketers who hire startups measure the success of engagement in relation to business outcomes.
•     Companies that engage startups largely do so within existing marketing budgets (88 percent), and a majority (53 percent) work with their agencies to help them partner with startups.
•     The biggest barrier to engagement is the startup’s inability to articulately describe its offering in a meaningful and relevant manner.

ADDITIONAL FINDINGS

On the plus side, respondents said startups are:

•     Small and nimble
•     Passionate about what they do
•     Driven to meet the client’s needs

At the same time, respondents indicated that problems can arise because startups:

•     Can pose security risks, particularly with sensitive data
•     May not be able to deliver on what they say they can accomplish
•     Often present legal and compliance issues
•     Sometimes go out of business before projects are completed

“Technology is influencing all aspects of our lives — and that’s no different for startups and marketing in the digital age,” said Steve Koenig, senior director of market research at the Consumer Technology Association. “We saw the world of startups, marketing, and technology converge at CES 2016, where we hosted C Space, the home for advertising, marketing, and digital content communities, as well as the Eureka Park marketplace, which featured more than 500 exhibiting startups. Based on the traffic we saw at these key marketplaces at this year’s CES and the findings of this study, it’s clear the novel solutions that technology allows are of utmost importance to marketers.”