New Study Shows More Than a Third of Surveyed Marketers Work with Startups

“Marketers clearly take a serious approach to engaging with startups, and this survey takes a deep dive into exploring the nuances of those relationships”

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The study “Brands Working with Startups,” was conducted by the ANA (Association of National Advertisers) in conjunction with the Consumer Technology Association™, formerly 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 also why advertisers turn to startups and what they expect of them.”

Key findings, which included responses from 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 that 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 their 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, 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 that 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.”

METHODOLOGY

The study was conducted in two phases. In the first phase, ANA members were sent a survey to which 171 responded. In the second phase, in-depth telephone interviews were conducted with 12 marketing executives recruited from the survey who engaged in 30-45 minute one-on-one recorded interviews.

The study used the Wikipedia definition of a startup as “an entrepreneurial venture or new business in the form of a company, a partnership or temporary organization designed to search for a repeatable and scalable business model.” The survey was focused on startups for marketing and advertising.

The full report also contains three case studies and is available to the media on request.

About the ANA:

The ANA (Association of National Advertisers) provides leadership that advances marketing excellence and shapes the future of the industry. Founded in 1910, the ANA’s membership includes nearly 700 companies with 10,000 brands that collectively spend over $250 billion in marketing and advertising. The ANA also includes the Business Marketing Association (BMA) and the Brand Activation Association (BAA), which operate as divisions of the ANA, and the Advertising Educational Foundation, which is an ANA subsidiary. The ANA advances the interests of marketers and promotes and protects the well-being of the marketing community.

About Consumer Technology Association:

Consumer Technology Association (CTA)TM, formerly Consumer Electronics Association (CEA)®, is the trade association representing the $287 billion U.S. consumer technology industry. More than 2,200 companies – 80 percent are small businesses and startups; others are among the world’s best known brands – enjoy the benefits of CTA membership including policy advocacy, market research, technical education, industry promotion, standards development and the fostering of business and strategic relationships. CTA also owns and produces CES®– the world’s gathering place for all who thrive on the business of consumer technology. Profits from CES are reinvested into CTA’s industry services.