The main task of marketing and advertising is the promotion of goods and services. Marketing and advertising technologies should simplify this process, speed it up and make it as efficient as possible. 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.
Challenges Madtech Startups Meet on The Way to Growth
Ever since 2010, investors across the globe 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 more efficiently target their buyer personas, and keep their customers around longer.
Unfortunately, Forrester research is reporting that investor funding for advertising technology and marketing technology startups is going to take a huge hit in 2023 – by a massive 75%. Specifically, the report predicts that funding will drop to $1.8 billion in 2023, down from $7.2 billion in 2022. 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 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 organizations or individual sponsors. Here are challenges for startups that have to be overcome in order to get success in 2023.
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 the 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 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. Attracting third-party contractors, outsourcing and outstaffing in this area will be one of the key aspects of growth and development. To gain an advantage over your competitors, it is important to make your product as high-quality and efficient as possible. In this matter, it is safer to trust professionals.
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Easily integrated platforms
Another MarTech problem in 2023 is the complexity of applying solutions offered by the companies. Jason Keath, CEO of Social Fresh, stated, that 90% of marketing software is not doing a good job on UI. The user interface for most of these ad tech platforms are too difficult. It is clear that these tools should be easier to use. With the dashboards and platforms being too complex, it is hard to learn what the full capabilities of the technology could be.
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, 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, any industry. This will provide wide coverage of the target audience, and therefore customers. Investments can be attracted more effectively when the success of the product 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.
Advanced development strategy
The strategy is the foundation and starting point of any discussion about marketing technology. It’s not about buying the tech and subsequently trying to fit it into your strategy. It’s the reverse: start with the strategy and look for the technology that can make the strategy happen. AdTech startups rarely have a development strategy that occupies more than five years. This is due to the fact that 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 those that are visible and the 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.
Investing in technology and people
Since digital advertising is no longer the 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 the competitors. Digital technologies offer ample opportunities for everyone, the main thing is to find the right usage for them.
Many challenges in marketing can be solved by implementing the proper solution designed on the basis of AI, Big Data, VR or AR. For example, Augmented reality offers immense marketing opportunities: this technology takes the mobile ad experience from boring to interesting and makes it immersive. For example, using your location, brands can trigger sponsored AR content, which can only be accessed at that location, at that time. Though in a nascent stage, such ads have the power to open up creative promotion avenues which enrich and personalize the user experience.
This is just one example of how technology can change the market for services. You need to be prepared for this in advance, which means that you should apply new tools now. If your knowledge is not enough, you have two options: hire a professional to your in-house team or hire a whole team of professionals for a certain 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.
Challenges for 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.
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