• by Richard Whitman , Columnist, February 2, 2016

In yet another indication of ad agencies' waning dominance as providers of a brand's marketing needs, a new study from the Association of National Advertisers found a hefty percentage of brands turn to startups for social media and content development and management.

The study, “Brands Working with Startups,” was conducted by the ANA in conjunction with the Consumer Technology Association, formerly the Consumer Electronics Association 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. 

Of the study, ANA President and CEO Bob Liodice said: “Marketers clearly take a serious approach to engaging with startups, and this survey takes a deep dive into exploring the nuances of those relationships. 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, revealed these data points: 

• 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.

Of the finding and his observations at CES, Consumer Technology Association Senior Director of market Research Steve Koenig said, “Technology is influencing all aspects of our lives and that’s no different for startups and marketing in the digital age. 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.”