Digital Marketing & Strategy

7 Reasons Startups fail at Digital Marketing – And how to avoid them

Nov 29, 2016
Reading Time: 7minutes

Why do startups fail at digital marketing when there is a plethora of information online on how to avoid?

You could have the greatest startup idea in the world, but it’s not going to grow as a business without the right marketing strategy. Startups fail at digital marketing because either they do not understand the concept or make mistakes when implementing various channels.

7 Reasons Startups fail at Digital Marketing

Established companies typically spend around 10% of their budget on marketing, but it’s a very different story for startups that need to achieve rapid growth to demonstrate their viability.

As every entrepreneur knows all too well, 9 out of 10 startups fail. One of the key factors that ultimately results in startups being terminated is the recognition that the company is failing to grow fast enough. This recognition creates a death spiral in which investors stop coming forward with cash and the startup is no longer able to pay its bills – even if there is a reasonable demand for the product or service.

As a result, it’s not uncommon for startups to spend above 50% of their budget on marketing and sales in order to break out of this high-risk phase in the life of a startup. With that kind of investment, they expect tangible results and the survival of their startup depends on it.

Almost all companies are shifting their marketing budget towards digital marketing as their customers increasingly move online and away from traditional media, such as newspapers, TV and radio. More than 50% of media is now consumed online globally, but the figure is even higher among specific audiences such as young people and residents of developing countries.

It’s not surprising then that digital marketing now represents one of the largest investments that many startups make. However, the amount of money spent is not nearly as important as spending it in the right way that supports business objectives.

Too many startups have learnt this the hard way so I’ve rounded up some of the most common digital marketing mistakes made by startups and how to avoid them.

1# No consistent message

Have you ever come across a company online then moved on with no real understanding of what they actually do?

There are times when even company websites don’t adequately explain the product or service on offer so I have to google “[company name] Wikipedia” because that can be the only place to find a description of the company written in plain language. Unfortunately, some startups take a thousand words to explain themselves, while others rely on stylish slogans and images.

Most entrepreneurs are well aware of the need for an elevator pitch offline, but the same is true online too. The difference is that online you have even less time to explain your company.

Start by working out the keywords you want to be associated with your company then write the shortest description possible. For example, Blu Mint Digital provides internet marketing services using SEO, PPC, content marketing, social media and email marketing for company sizes from startups to enterprises. 

You then need to ensure that message is repeated in everything you do from content and marketing material to metadata and captions. This is great for SEO, but also ensures your customers are never left in any doubt about your focus as a business as they will need to see it a few times before remembering it.

2# Not understanding your target audience

I once saw an advert pop up on my Facebook feed for women’s beauty products on sale in Edinburgh. As a single man living in London at the time – and not one that spends a great deal on beauty products anyway – I thought their targeting was a little off.

This is an extreme example, yet many startups do embark on their digital marketing without first properly understanding who their target audience is.

We can now target demographic groups online like never before – by age, gender, location, interests and which websites they visit. However, your startup needs an even deeper understanding of how your key audiences use the web.

7 Reasons Startups fail at Digital Marketing
Facebook Ad Audience Segmentation

There will always be debates within the digital marketing industry about which tactics and channels are the most effective, but the truth is that this entirely depends on your audience is.

Perhaps your key audience has already formed communities online in specific locations, like social media groups, where they are discussing the need for a product or solution like the one you offer. Maybe your key audience is made up of individuals who are desperately googling specific keywords late at night to find a product or service like yours.

This behavioural information, along with broader demographic trends, is vital as it will form the basis of the most effective digital marketing strategy for your startup.

3# Broadcasting instead of engaging

One of the most important advice that successful entrepreneurs often give offline is to launch startups as early as possible. Instead of waiting for perfection while dipping their toe in the market, startups need to jump straight in and figure out what works best.

The same is true online. Some startups can be reluctant to get started properly until their website, branding, strategy and messaging have all been perfected.

However, digital marketing should be seen as an opportunity to engage with the very people who can help you fine tune all these aspects of your startup. You can use your digital marketing to start a conversation with them and gather feedback about how your startup can improve and evolve.

This isn’t just valuable advice for your startup from the people who know best. It’s also a way to let your customers feel even more engaged in your brand.

4# Talking about yourself too much

You’ve probably been to a party where you’ve ended up in a conversation with that one person who

always talks about themselves. They think they are interesting and, in some ways, they probably are. But we’re guessing you wanted to stop engaging with them.

Many startups use digital marketing in the same way. They post constantly about their products, their services and their news – and it gets quite dull.

It’s important not to be be anti-social on social media. Instead, the most successful startups focus on their expertise instead. They post about subjects that genuinely interest their target audience and offer their unique perspective and valuable insights.

You probably already know that Red Bull is an energy drink that “gives you wings”. However, their

7 Reasons Startups fail at Digital Marketing
Source: USA Today

enormous marketing efforts both online and offline almost never talk about the drink. Instead, they’ve taken the theme of high energy and created endless content about high-energy lifestyles and sports that their target audience loves.

It doesn’t always matter if their logo is visible or if their sales messages are front and centre. This approach is far more effective at growing an audience and establishing the reputation of your startup within your industry.

5# Using too many digital channels

It’s a good idea to register as many social media channels in your company name as possible, at least to prevent others from using them. The last thing you want is a disgruntled customers with control of your name somewhere online.

However, you don’t actually have to use them all. Many startups spread themselves thinly across social media by trying to communicate in as many places as possible.

You should ask yourself which social media channels are most important to your customers and – crucially – which channels you have the resources and strategy to sustain. If you start running a social media channel that you need to ensure it constantly reflects the quality of your brand so it’s often a good idea to keep some accounts dormant.

A startup with very visually appealing products and services will benefit most from Instagram. A startup that needs to continuously talk to customers will benefit most from Twitter. Facebook is useful for almost all businesses, but don’t feel like you have to be everywhere.

6# Not measuring success

7 Reasons Startups fail at Digital Marketing

Startups are often told not to expect any overnight success from digital marketing. It’s important advice because digital marketing requires consistent effort over time before there is a business impact.

However, that doesn’t mean you shouldn’t still be carefully examining what impact – if any – your digital marketing is making from day one so that you can find the right path to success.

There’s no end of data that can now be collected using the right tools – from Google and social media analytics to specialist software that a good digital marketing agency will already have at their disposal.

At the very least, you should be able to compare how different strategies are moving the needle and then adapt accordingly.

7# Expanding your marketing department too quickly

Every entrepreneur knows the importance of starting lean, although this often gets forgotten as their demand for digital exposure rises.

Digital marketing requires a wide range of expertise, including pay per click (PPC) advertising, search engine optimisation (SEO), media relations, content production, social media management and influencer engagement. This often requires more than one person to be effective so it can be tempting for startups to keep expanding their team.

Make sure you exhaust every low cost option possible first though. This includes using agencies and freelancers who can provide a wider team, but only for the scale that you currently need.

If you need digital marketing support then feel free to contact our team. We specialise in startups and are always happy to help!