Is Media for Equity worth it for a Startup?
Media For Equity is a form of investment used by startups and large media so that the latter form part of the company's capital, and it accesses advertising in mass media, usually in television commercials. There are companies that have already hit the roof with digital marketing and need to resort to this type of advertising.
Media groups such as ATRESMEDIA and Mediaset, in the case of Spain, usually become part of the capital with 5% and 10%. And so startups access advertising campaigns in these media. These advertising packages are usually much cheaper than if they were contracted with the real value of the advertising space.
But not all startups can access this type of investment, we list some characteristics that they must meet:
- Startups with consolidated and validated business models that have pivoted.
- They have to be very scalable products.
- They must be B2C Business to Consumer companies, which are focused on the final consumer.
- They must have well-structured technology, capable of receiving millions of visits and a very large number of new users.
- They must have an advanced dashboard, with which campaigns can be analyzed in real time.
- The product or service must be present in most of the geography.
Startups must also take into account several factors before agreeing on a media for equity:
- If advertising is about commercials on TV, you have to make clear the broadcast times, channels, programs between advertisements, etc... Prime time is not always the space that best fits the product.
- See if the media outlet is already advertising or negotiating with competitors.
In Spain, there are already several companies that have opted for this type of investment, and more than 70 million euros have been invested to date.
These are some Spanish startups that have participated in a media for equity:
- The red fridge.
- The TV cabinet.
- Wallapop
- Corberjobs
- Promofarma
- Fintonic
- Grupalia
As you can see, there are very few startups that are eligible for this type of funding and allies, but the advertising market is very large and not everything consists of placing an advertisement on television.
Startups should be encouraged to explore all the possibilities offered by marketing, especially in digital marketing, where costs are reduced and segmentation can be more powerful.