Startups Sick of Facebook Swap Equity for TV Ads
Small companies book prime-time advertising—and offer media companies a shot at a big payday.
For the better part of a decade, consumer-focused tech startups have followed a time-tested recipe for success: Pay Facebook Inc. and Google to get in front of exactly the right people, burnish your brand with aspirational Instagram posts, and leaven the mix with the occasional mail drop or a newspaper or magazine campaign. Lately some ambitious newcomers have spiced up that formula with a medium often written off as far too 20th century—good ol’ broadcast TV—and they’re willing to hand over precious equity to use it.
“There’s a limit to how seriously you’re going to take a business that you only see on Instagram,” says Ben Farren, founder of Spoke, an online seller of casual clothing that has offered a stake in the company in exchange for as much as £2 million ($2.8 million) in advertising on ITV Plc, the U.K.’s biggest commercial broadcaster. “There is stardust in making a TV ad. It’s really energizing. You can’t put a value on that.”