Report: Marketers are turning to startups for marketing innovation

New US report shows how brand leaders are increasingly turning to startup organisations to leverage up-and-coming technologies and gain a competitive advantage

Marketers are increasingly turning to startups to leverage up-and-coming technology, drive innovation and gain competitive advantage at a reasonable price point, a new report has found.

The Brands Working with Startups study, which was conducted by the US Association of National Advertisers (ANA) in conjunction with the Consumer Technology Association (formerly Consumer Electronics Association), showed more than one-third of B2B and B2C marketers surveyed are working with startup organisations.

The primary activities for engagement were social media (53 per cent) and content development and management (49 per cent), followed by research and analytics (45 per cent), mobile advertising (43 per cent) and marketing automation (39 per cent).

The report also found that while startups were almost exclusively providing technology solutions, marketers and advertisers using them indicated they’re not buying technology, but rather, buying a solution to a business problem.

The majority of these relationships are being funded through existing budgets. In addition, 53 per cent said they’re working with their agencies to help partner with startups.

Marketers who strike up partnerships with startups are basing the success of the engagement on business outcomes, and highlight nimbleness, passion and client-oriented focus, as valuable startup attributes.

With client-side organisations, it’s most often the current media management or digital management team that’s working with the startups, followed by current brand management teams.

The biggest barrier to engagement, meanwhile, is a startup’s inability to articulate their offering in a meaningful and relevant manner. Other issues impeding relationships are potential security risks, particularly around sensitive data, lack of execution, legal and compliance challenges, and a startup going out of business before a project is completed.

The study was based on an initial survey of 171 ANA members, followed by in-depth interviews with 12 marketing executives recruited from the survey.

ANA and CEA said startups were defined as an “entrepreneurial venture or new business in the form of a company, a partnership or temporary organisation designed to search for a repeatable and scalable business model”.

A number of well-known brands have partnered with startups recently to improve their digital marketing capabilities.

Snacking giant, Mondelez International, has rolled out its Mobile Futures Program in multiple countries over the past three years aimed at helping the brand extend its mobile marketing investments through startup partnerships. The program was run in Australia in 2014 and saw five brands partnered with five local startups in the mobile space.

FMCG giant, Unilever, is also running the Unilever Foundry global initiative aimed at supporting technology entrepreneurs through pilot projects, mentorship and partnerships with its marketing teams. Again, the initiative is aimed at driving digital change and modern marketing opportunities.

Closer to home, insurance provider, NRMA, has run two rounds of its startup funding program, Jumpstart, a program aimed at helping startups with ideas that could benefit NRMA members to get off the ground.

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