At last week’s DC launch event for Startup Mixology, the first book from Tech Cocktail’s own cofounder, Frank Gruber. Gruber was joined on-stage by a handful of local entrepreneurs to discuss some of the topics covered in the book. Among them was Rohit Bhargava, the founder of the Influential Marketing Group, author of Likeonomics, and trend curator. After giving his thoughts on what startups should be doing in terms of branding, Bhargava went on to talk about the current trends taking place in marketing and opines on what startups are doing wrong. Mainly, he says that startups need to stop thinking that selling advertising is a viable strategy for income.
“I think the most troubling thing is that most startups think that the way to make money is to sell advertising,” said Bhargava. “That’s not what brands are buying, and there’s a mismatch because advertising, first of all, is usually purchased by a lot of these media buying agencies and they’re just buying impressions. And, as a startup: you don’t have that many people [looking for you online], so the wrong thing to sell is advertising in the traditional sense of impressions because that’s what brands are buying and you don’t have it.”
According to Bhargava, trying to make money from selling advertising is a ridiculous strategy for a startup. If you’re a startup, innately this means that you’re new to the market, so trying to make money off a strategy that’s centered on page impressions is ludicrous since only a fraction of people will load your website on a daily basis. Through his consulting experience with startups, Bhargava believes that implementing this kind of strategy is one of the most egregious offenses that a startup can commit. But, then, what strategy should startups take on?
“The right thing to try and sell is something that’s more focused on either sponsorship or content, which is a different [approach]. It may seem like a super nuanced thing to somebody who’s not in that [marketing/advertising] world to say ‘well, isn’t advertising just the same as sponsorship?’ But it really isn’t because one of the things I try to do is connect the right startups with the right brands for pilot programs…It really sucks to try and sell on a CPM basis…and it doesn’t make sense…it’d be like trying to sell your book[…]based on ‘pay me per word that you read of the book’ – that’s like the dumbest thing ever. Wouldn’t you rather do a set deal: [some company or brand] is going to pay [you] X amount for this program, and [you’re] going to do it as a pilot, and [you] know what the effectiveness is going to be like.”
For Bhargava, a better strategy for startups is to focus more on getting brands to sign on for sponsorships or to sell a set of curated content. It’s a much better model, and it’s worked great for several startups that have grown rapidly, such as Upworthy and BuzzFeed. He adds, though, that sites like BuzzFeed and Upworthy have also contributed to a new trend in the media space.
“I think one of the biggest trends, which I think is affecting media across the board is something that I’ve called ‘curated sensationalism’. This idea that the more sensational you could make it – you don’t even have to have a new or original story, you can find a video that was posted online 20 years ago.”
Bhargava noted some concern over this trend, though, citing a top story on the Yahoo! homepage a couple year ago called “Squirrel Dodges Lamborghini”- a sensationalized piece on what was literally just a squirrel running across a race track and dodging a Lamborghini. “Like, that’s the number 1 story, [then] we are all royally fucked.”