Last year, my agency announced it would stop meeting with ad networks, except in very specific circumstances. It’s a common sense decision, driven by our need to be efficient with where we spend our time, as well as an obvious redundancy and conflict of interest on the network’s side.
Thanks to accelerated investment in the digital marketing technology sector, though, there are a number of small startups knocking on agency doors. Some of these might evolve into the next big marketing platform. But let’s face it: Most of them will not. But with a huge number of ad technology startups vying for attention, how do we sort the wheat from the chaff?
As an agency, you might decide to limit your exposure to ad networks, just as we have done. But that takes care of only a portion of the problem regarding inefficient vendor meetings. Here’s three more types of companies you should actively avoid meeting with:
Companies That Are Really Product Features
A basic tenet to consider when launching a startup is “Can someone easily move into my space?” An even more basic one is “Does somebody else already offer what I’m selling?” And it would appear that not all startups do their homework in this regard, because apparently a bunch of them are wandering the landscape unaware that their main value proposition is already delivered upon by a broader technology solution.
There are dynamic creative vendors who don’t realize that their “proprietary optimization methods” are standard features of more established ad management suites. There are social media companies founded on the notion that it’s too cumbersome for a website to add its own social sharing buttons. You get the picture.
If a company doesn’t realize its raison d’etre is somebody else’s product feature, don’t schedule the meeting.
Companies Following Failed Business Models
I’m not talking about companies that are predicted to fail. I’m talking about companies that resurrected a previously-tried-and-failed idea without realizing it.
I’m finding that one of the most useful questions to ask startups in this category is “Somebody tried this idea 10 years ago and it failed. What is different about your approach that leads you to believe you’ll succeed?”
In some cases, new companies have not even heard of their predecessors. In others, the startup has some new wrinkle or previously-missing technology solution that breathes new life into the failed idea. Unfortunately, I’m finding more startups fit into the former category than fit into the latter.
Companies That Provide Little Upside for Comparatively High Risk
Your agency likely already has oodles of trusted vendor relationships, each of which contribute to your ad tech stack in some way. Obviously, competitors will want to aim to supplant some of those relationships with promises that they’ll do the job better, faster or more cheaply.
But it’s important, before embarking on a mission to replace something that’s working well, to understand the potential upside. Very often, I’m approached by vendors who deliver technology that’s at parity with what I already have in place. In such cases, there needs to be a significant upside to dislodge my preferred vendor. Nobody wants to risk 100+ man-hours’ worth of tech integration and troubleshooting, coupled with thousands of dollars in potential costs, just to achieve $100 worth of upside on ad response rates or something equally silly.
A good question to ask startups prior to a meeting is not “How are you better?” but “How are you appreciably better than what I have now?”
As aggressive investment in the ad technology sector continues, you should expect the meeting requests to continue to accelerate in terms of number and frequency. You should also be reminded of the first dot com boom, provided you were in the digital space at the time. Hang in there and wait for the irrational exuberance to evaporate. And if you’re careful about who you meet with in the interim, you should do just fine.
Tom Hespos is a contributor at The Makegood and Founder and Chief Media Officer at Underscore Marketing, a boutique firm that creates and manages digital marketing programs. Look for Tom’s column the 1st and 3rd Friday of every month.