Media buyers play a vital role in the success or failure of emerging marketing technologies. Take a page from the venture capital community, and ensure you're making smart investments with your time and money.

In evaluating emerging technologies, media buyers need to think like venture capitalists. After all, the risks they take on new platforms and technologies aren't all that different from the risks undertaken by VCs. In dabbling in emerging opportunities, media buyers invest their time and money -- as well as their clients' time and money -- in the success (or failure) of these third parties. And in doing so, they put their reputations on the line.

Fortunately, despite the inherent element of risk, investment in startup companies and emerging technologies isn't a complete gamble, said Brian McAndrews, managing director at Madrona Venture Group. During his keynote presentation at the iMedia Breakthrough Summit in Henderson, Nev., McAndrews laid out six criteria that he uses when evaluating new investment opportunities. He urges media buyers to make similar assessments when deciding where to invest their clients' dollars.

1. Team
A technology is only as good as the people who stand behind it. Thus, in evaluating an emerging technology from a startup venture, it's important to consider the company's leadership team. "This is arguably the most important because the businesses can change," McAndrews said. Few companies and technologies proceed undeterred down the paths they originally envisioned. Thus, marketers must be confident that the people leading a given startup enterprise have the ability, experience, and vision to recognize market shifts, adjust their business plans, and scale them as needed.

2. Defensible technology
It goes without saying that the technology behind a new marketing opportunity needs to be sound. And that means it should be defensible in terms of functionality and uniqueness, as well as from an intellectual property standpoint, McAndrews said.

3. Large market opportunity
If venture capitalists invest $10 million in a new enterprise, they hope that enterprise will provide a return of $100 million over time, McAndrews noted. And that means that the underlying opportunity needs to have some scale in proportion to the amount you invest. In this sense, marketers should also consider whether the technologies in which they invest are addressing a market opportunity large enough to sustain the business into the future and provide value to its adopters. 

4. Competitive advantage
Competitive advantage can manifest itself in many areas, such as exceptional customer service, McAndrews said. In other words, what sets the company apart in terms of how it will sustain its business into the future?

5. Compelling business model
Not all companies will make money right out of the gate. And only a rare few will be acquired before having to demonstrate that they can bring in revenue and ultimately turn a profit, McAndrews noted. So for the most part, investors need to look for companies with compelling business models -- ones that suggest the ability to make money at some point in their evolution.

6. Market timing
Market timing isn't entirely within anyone's control. So what it really comes down to is an investor's (or media buyer's) own judgment. "Is this the right time in the market for whatever product they're launching? We've all seen products and heard entrepreneurs say, 'You know, we were just too early.' And then there are others that were too late, and the market had already left them behind," McAndrews said.

In conclusion, McAndrews recommended marketers use the following question checklist when evaluating emerging technology opportunities: 

• What pain point does this remove for me or my clients?
• How significant is that pain point?
• How well does this solution integrate and/or leverage current technology and processes?
• How significant is the value? And who captures what portion of the value?
• Are our objectives aligned?
• Am I taking the long-term/strategic or short-term/tactical view?

The answers to the above questions can help marketers determine which opportunities are worth their time, money, and reputation investments. Those that alleviate significant pain points for marketers and their clients, providing significant value to all parties over the long term, are the ones that are likely to stand the test of time -- and pay dividends in the future.
 
Lori Luechtefeld is editor of iMedia Connection.

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