Startups are undeniably cool now, so it’s no surprise agencies are often touting their work with up-and-comers.
Those partnerships sound fruitful for both sides in theory: Startups can access agencies’ clients and their marketing experience, while agencies can keep abreast of the hottest marketing trends. But in reality, agencies too often over-promise and under-deliver – and the stop-and-start nature of the agency world can be maddening to time- and resource-strapped startups.
“One of the biggest frustrations I’ve seen between startups and agencies is rooted in the repeated dog-and-pony shows,” said one entrepreneur. “Agencies love to bring startups in, have them pitch their wares, and often do so repeatedly for their internal teams and for their clients — all with little apparent ROI for the startup.”
Most of those “dog-and-pony shows” are just exploratory and educational for agencies, in the form of both phone calls and presentations to small groups, he explained. And it often takes a long time for a deal to materialize due to the educational process and the fact that many big brands don’t move fast — their budgets are planned well in advance.
“It’s truly a sales process, and agencies are part of it,” said the entrepreneur. “Startups just need to be persistent and remain patient. If you’re good at what you do, are offering something valuable, and stay engaged, it can pay off in big ways.”
It can, but agencies have a very different business model. A meeting that goes nowhere for a startup is an opportunity cost, but for an agency it’s just more billable hours.
Chico Tirado, co-founder and chief revenue officer for influencer marketing startup Gnack, added that agencies are always under pressure to perform due to their clients’ requests (which are sometimes very sudden). This sometimes means “vetting a lot of service providers and not actually working with them.”
Clients can also simply kill projects. After all, the old joke is that clients want something that’s never been done before but with guaranteed ROI.
“Many of our agency partners go very far down the road of what would normally be a full campaign, only to lose the pitch, or have the advertiser client pull the best ideas and then execute in-house,” said Dave McIninch, chief revenue officer of performance marketing startup Acquisio. “This is part of the reason why agencies are guarded about showing a technology as a standalone to their clients — the ROI for the agency isn’t there.”
Another reason why agencies are slow in introducing startups to brand advertisers is that they often want to present a polished plan to their brand clients, so introducing a startup that is inexperienced in presenting could reflect poorly on the agency. Additionally, agencies sometimes like to use startups as a “surprise and delight” later on in the process, benefiting the agency but not the startup as minimal budget exists after a certain point in the planning phase, said Ben Kosinski, director of the Collaboratory at agency iCrossing.
“I think agencies need to understand that time is a constraint — a startup cannot wait for four months for an idea to come to fruition,” said Kosinski. “Agencies need a person who understands the startup community as a liaison.”
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