Great Unfulfilled Expectations — Are media agencies helping or hindering start-ups?
This week, Ana Pak , our Global Digital Strategy and Innovation Director has a delve into the state of start-up/ agency relationships.
After signing up to do an article for our global blog I spent a while pondering what to write and whether it would qualify as ‘thought leadership’. It wasn’t until taking a coffee with the founder of an emerging data company I was recruiting, who shocked me with her sense of deflation towards working with media agencies that I landed upon the topic of this piece.
Was this deflation shared by all the start-ups we work with? What do the start-up community envisage when working with media agencies?
Having begun my career at a start-up I am familiar with how they operate — the highs and lows, and that every project and resource is crucial. So have start-ups been left with burst bubbles of over-promising and under-delivering by agencies? Will this attitude cause start-ups to avoid media agencies when approaching brands?
Over the last five years, Europe has exploded onto the tech start-up scene, closing the gap with Silicon Valley. Today over 1000 tech start-ups are operating in Europe with over €8bn in funding secured in 2016, which is up 12% according to Dealroom, a European venture capital database. Whilst this growth isn’t just fueled by VC funding, many Fortune 500 brands are actively contacting, incubating and investing in tech start-ups. Yet growth and expansion are still major challenges in Europe, where we far behind Silicon Valley in terms of unicorns (company valued at more than $1bn).
It’s cool to work with a start-up
The number of interactions between brands and start-ups has grown in the last five years, as increasing numbers of brands see new companies as an opportunity rather than a threat.
Many brands now have an innovation function or established roles charged with this remit, whether it is one member of staff, an innovation lab, or a mechanic for sourcing and funding emerging companies.
One of the chief motivations for brands is to demonstrate their innovation credentials by showing up with a start-up on their arm. Start-ups can be brought on to simply do innovation for innovation’s sake, without embedding it in the business objectives or being part of the business solution.
To mirror this demand and motivation, many agencies now have some sort of start-up engagement program, from boutique digital agencies to traditional media agency groups.
Working with start-ups is seen as cool, and everyone wants to leverage this opportunity, with many projects being heavily PR-ed.
These agency start-ups programs take varying forms, from competition formats to joint ventures, but they all promise one thing: the lure of access to the agency’s roster of clients. However it seems that many start-ups aren’t getting this promised grail.
Working with start-ups shouldn’t be a PR opportunity. Like a media plan it needs to deliver value and results, and be tested and stretched and re-tried. So the nature of our interactions with start-ups must change.
Three takeaways
From my work on Spark, our own agency start-up program, we have learned a few things:
- Be clear, honest, and responsive to manage expectations for both brands and start-ups.
- Pay them for their time.
- Set expectations at the outset about what you can offer them and what is realistically attainable.
The biggest barrier to start-ups working effectively with a brand is company size. Large companies have procedures and stakeholders that all have to be a part of the process, and many start-ups struggle to fulfill the criteria from brands of, ‘we need more established companies to manage our business needs’. And this is where agencies can absolutely deliver value for brands and start-ups.
Agencies can help start-ups navigate complex corporate business structures through their existing channels. And by adopting effective working practices, can contribute to stronger growth in Europe. Ensuring the great expectations of both agencies and start-ups can finally be fulfilled.
