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MadTech: Challenges For Startups In 2024
Promoting products and services is the primary goal of marketing and advertising. Technologies related to marketing and advertising should streamline, expedite, and maximize the effectiveness of this process.
As a rule, MadTech startups seek to accomplish these tasks using cutting-edge methods. But challenges for startups can be a serious obstacle to development and getting a new level of investment.
Research indicates that consumer resilience is robust in spite of the present state of macroeconomic uncertainty.
Over $4 trillion has been added to consumer savings, which are still rising, particularly among top incomes.
In addition, consumer spending has increased since the beginning of the pandemic and has increased above prepandemic levels in several areas.
This suggests that wise business leaders will not recklessly cut advertising budgets, but will instead be smart about how they allocate money considering the emerging madtech trends.
This means that startups must adjust to current realities in order to attract substantial investment.
Challenges Madtech Startups Meet on The Way to Growth
Ever since 2010, investors across the globe have seemed to put money towards anything, resulting in an incredible surge of marketing and advertising technologies, from mobile apps to SaaS.
These great breakthroughs have allowed marketers to more easily and efficiently target their buyer personas, and keep their customers around longer.
In 2024, madtech market size is projected to decrease significantly, dropping from an average of 9.1% of company revenue in 2023 to 7.7% in 2024.
This decline represents a compounded financial pressure resulting from several years of budget reductions, indicating that CMOs must navigate an era where investment growth is no longer assured but rather earned in the madtech industries.
This is especially bad news for startups, which plan to get the next level of investment this year. Funding levels for startups mean a new stage in development and an opportunity to transform into a big enterprise.
This is why it is so important to offer a market product that will be invested by banks, financial organisations or individual sponsors.
Here are madtech industry challenges for startups that have to be overcome to be successful in 2024.
1. Unique Product
The rapid growth of MadTech, which was secured by large investments in this sector, caused one of the biggest problems in the industry – too much diversity.
All new tools filled the market, not giving the opportunity to properly test the previous ones. Because of this, other companies offering an innovative product took place of the bankrupt companies.
However, the market could easily shift them with the emergence of new ideas and startups.
It is predicted that a reduction in financing will allow weeding out truly effective tools and distinguish them among similar or less effective ones. These products and companies will receive decent financing and investment, which will allow them to grow further.
However, there is another way to get money for development: to create a truly unique product or to transform an existing one into something necessary in the market at the moment.
To be unique means to solve some narrow problem of the madtech industry, that is, to occupy a niche or to offer a universal product that can cope with several problems at once at the price of one tool.
Evolution marketing and advertising imply not only the original idea, but also the latest way of its implementation.
Another prediction from the experts – almost all advertising will become digital. And this means that the use of the latest digital technologies is becoming a prerequisite for further growth and development.
One of the most important components of future of madtech will be luring outside contractors and outsourcing.
Improving the quality and efficiency of your product is crucial if you want to outperform your rivals. In this matter, it is safer to trust professionals.
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2. Easily Integrated Platforms
Another MarTech issue in 2024 is the complexity of applying solutions offered by companies.
Jason Keath, CEO of Social Fresh, stated that 90% of marketing software development for MadTech is not doing a good job on UI.
The user interface for most of these ad tech platforms is too difficult. It is clear that these tools should be easier to use. It is challenging to understand the full potential of the technology due to the complexity of the dashboards and platforms.
In addition to multi-functionality, the proposed solution should be clear and easy to use. Writing long instructions or tutorials will not make the product more attractive and even clearer, no matter how great options it has.
Intuitive and pleasant interface with, possibly, tooltips, is the very same hook to which you can pick up a potential client. That is why design needs to devote as much time as it does to developing content.
Moreover, your platform should be easily integrated into any business or industry. This will provide wide coverage of the target audience and, therefore, customers. Investments can be attracted more effectively when the product’s success is confirmed by the positive feedback from users and their achievements, which were obtained with the help of your product.
Also, experts recommend creating platforms that can be connected to other similar products or tools. Of course, it is worth developing as part of your own services, if you follow the path of creating an original application or toolkit for marketers.
However, this can also be used if you offer extensions and add-ons for existing products, both your own and from third-party companies. The main thing is to ensure that copyrights are not violated.
3. Advanced Development Strategy
The strategy is the foundation and starting point of any discussion about marketing technology. It’s not about acquiring the technology and then attempting to incorporate it into your plan. It’s the reverse: start with the strategy and look for the technology that can make it happen.
AdTech startups rarely have a development strategy that lasts more than five years. This is because the emergence of new technologies may shift the emphasis or force a complete revision of development plans.
And yet, a thought-out strategy for the development of a MadTech startup is very important, as it allows to determine the steps in the company’s growth and its promotion in the market. An improved development strategy takes into account many factors: both visible and hidden ones.
Forecasts from experts, market research and target audience surveys, new technologies and emerging competitors – all this should be in the constant field of vision of the company, which seeks to get a new level of funding.
The use of deep analytics, AI and Big Data, is no longer a luxury, but a necessity, if a startup intends to hold out for more than one or two years. This means that the startup growth strategy requires not only investments in its development, but also in its implementation.
Always remember about learning. The positive experience of large companies and entrepreneurs who have already managed to use analytical tools or useful solutions in building a strategy should be adopted almost immediately.
But! This knowledge must also be passed through the internal filters of the company and applied only those solutions that will be most effective for your company, that is, taking into account the specifics of the business and the niche that you occupy.
4. Investing in Technology and People
Since digital advertising is no longer a distant future but an effective tool actively used by companies today, startups must also arm themselves with the necessary tools to be one step ahead of their competitors.
Digital technologies offer ample opportunities for everyone; the main thing is to find the right usage for them.
By using the right solution built on AI, Big Data, VR, or AR, many marketing difficulties may be resolved.
For instance, augmented reality presents enormous marketing potential since it transforms the dull mobile ad experience into one that is engaging and immersive.
Brands may, for instance, use your location to activate sponsored augmented reality content that is exclusive to that area and time.
Despite their infancy, these advertisements have the potential to create innovative channels for marketing that enhance and customize the user experience.
This is just one example of how technology can change the MadTech market for services. You need to be prepared for this in advance, so you should apply new tools now.
If you feel that your expertise is insufficient, you may either add a professional to your team internally or engage a group of specialists to work on a particular project.
Investing in staff is as important as investing in tools. The use of the latest solutions will require from your employees the specific knowledge that they can gain through training.
Or you can recruit new employees with the necessary skills and knowledge.
As practice shows, to grow a professional and an expert inside the staff is a laborious and complicated process, but it quickly pays off when it comes to finding an efficient solution for a client.
5. Privacy and Regulatory Challenges
Although third-party cookies have contributed to the growth of targeted advertising, some of it actively benefits the customer due to relevance, they also raise privacy concerns.
Third-party monitoring is criticized for allegedly violating users’ privacy rights by collecting and sharing personal data without the users’ express consent. In a world without cookies, the first-party data that is skillfully stewarded and directly acquired from users through consent-driven interactions will become more and more important.
Customers may receive more tailored offers and information on websites they directly interact with if first-party data is prioritized.
Advertising agencies need to use new tools and techniques in order to effectively target and assess their efforts:
They have to give top priority to gathering information straight from people via software development services for startups. Data acquired via user interactions, purchases, and registrations may fall under this category.
There is a wealth of data in many organizations. Rather than user behavior, ads are provided depending on the content of the page.
This method ensures privacy-friendly targeting by matching ads to pertinent content based on the keywords and themes of a page.
Different parties can bring and compare data sets under protected settings without exchanging raw data. Amazon Clean Room and Google Ads Data Hub are two examples. They protect user privacy while offering thorough data analysis and measurement.
Using CMPs makes it feasible to manage user permission for data collection and usage, build user confidence, and guarantee compliance with privacy laws.
6. Cost Management and ROI
In difficult circumstances, marketing is sometimes the first department to be trimmed, but this is a shortsighted tactic.
On the other hand, companies may invest in marketing as a strategy for long-term growth. These reductions in marketing, in our opinion, are ill-advised.
Marketing is more crucial than ever in uncertain economic times. Companies should empower their CMOs to think like investors rather than cutting.
Marketing professionals have faced challenges over the last three years due to rapidly shifting customer perception and rising prices.
In these uncertain economic times, shoppers are still looking for better deals, therefore they are trading down.
In 2024, eighty percent of customers said that they are altering their purchasing habits, either by reducing the amount or size of the packs they purchase or by moving brands or merchants in search of more affordable options.
Meanwhile, the expense of marketing has been increasing. There has been a 20 percentage point increase in the average cost per click.
Companies should adopt an investor attitude and approach marketing expenditure more granularly, cutting down where they are currently overpaying but also investing more where there is better potential for longer-term return on investment, rather than focusing too much on deep and brutal budget cutbacks.
Eliminating wasteful spending might result in savings for successful organizations of 10 to 20 percent.
They may differentiate themselves from their rivals if they use those savings to spend in more effective startups software development and focused marketing that generate 5 to 10 percent growth.
Challenges for madtech startups in the marketing and advertising industry may appear throughout the path of growth and development.
Receiving the next level of investment needed for this development itself is possible only under the condition of tireless work on your company and product.
The more investments you want to get, the more effort you will have to invest in your own business. However, following the advice of experts, you will be able to achieve success and your goals.
Want to know where best to invest your money? Get advice on the latest IT technologies. Contact the experts at Computools at info@computools.com to find answers to all your questions.
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