Everyone is at South by Southwest this year, and by everyone I mean my VC, startup, and media agency friends. SXSW Interactive caught the attention of ad agencies when social media startups started to take off bringing in ad industry dollars and attention. It’s prom for digital startups and agencies with Prom Kings in the past few years being some of the biggest names now: Twitter (2007), Foursquare (2009), GroupMe (2010), and Highlight (2012 – verdict still out, but the buzz is there) and agencies have the first dance. However, in the past few years – it’s become more of a bad one-night stand instead of lasting relationship between agencies and startups.
iSXSW has lost its appeal with startups that actually have a lot to gain by meeting the right people within media agencies and the right people within media agencies aren’t present at iSXSW anymore. Look at the roster of media agency people present and you’ll see job titles like ‘Head of Social Media’, ‘Emerging Media Director’, ‘Innovation Director’, etc. However, there’s a major player missing from that lot – the media planners and buyers (the ones that actually sell in the media recommendation to Brands). In the past few years, more and more startups have been burned in the hopes of getting in front of major brands via media agencies. Media agencies promised the world to startups showing them off like the latest trophy wife only to be dumped quicker than the duration of Kim Kardashian’s wedding. You have two completely different mind sets – agencies think about the relationship as a potential gimmick or case study while the startup is looking at the relationship as a way to bring in money to show their investors they’re legit. You have an uncomfortable first date when both parties are not on the same page from the get go. So what’s the resolution? Should agencies continue to reach out to startups? Should startups ignore agency calls and find a more stable relationship to pursue? Should both parties take the “let’s just be friends” approach and leave each other alone?
There have been plenty of successful Brand and Startup advertising relationships: Foursquare and BravoTV, GroupMe and Coachella, Twitter and Zecco, Redbox and Tap.me, etc. However, most have come from either VCs reaching out to their contacts to connect key Brands with one of their portfolio companies or a startup going direct to a client. Agencies have made efforts in trying to work with startups as we’ve seen with the formation of VC arms of agency holding companies like IPG’s MediaBrands Ventures and Publicis’ Vivaki Ventures. However, there’s a major trend to be even blunter about what each party wants out of the relationship with the formation of dedicated ‘Startup-Brand Matchmakers’. It’s like online dating for startups looking for advertising love from Brands. Sites like HearMyPitch.com and Joseph Jaffe’s new agency, Evol8tion.
Personally, I see media agencies as capable and competent enough to connect startups with Brands. However, media agencies need to work on their relationship skills and find a way to be more “invested” in the relationship rather than a “love them and leave them” type of mentality. Startups should absolutely ignore agencies stringing them along. Media agencies need to realize startups literally look at their VC funds and divide it by the amount of days they can stay in business before going bankrupt so time is precious for them and media agencies should keep that in mind when engaging in potential opportunity discussions. If a media agency wants to be serious about connecting a startup with a Brand they need to be upfront about what they want from the relationship, bring in the right people (i.e. the media planner/buyer – not the social/innovation media person that talks a good talk), and follow through.