The importance of targeted advertising for startup ecosystems in Europe

November 18, 2021

Testimonials from startup innovators and ecosystem builders

You didn’t hear it from us – hear from European ecosystem builders below on why targeted advertising matters for the launching and scaling of innovative businesses in Europe.

The Digital Services Act is a landmark political file that can update and clarify the legal framework for startups operating in the EU. In turn, these startups can tackle the green and digital goals the EU has set itself. However, a severe limitation or ban on targeted ads would fundamentally undercut startups’ abilities to launch and scale in the EU. 

Read below about why and how targeted ads play a role in leading startup communities across the EU:

“Targeted ads are not just about the flower shop on the corner and the B2B SMB. This hits the very nerve of Europe’s ability to create new global winners. The hyper competitive race from validating your prototype to conquering new continents is based on the ability to onboard new customers effectively. I am certain that the next giants of any given industry will be Asian or American, without targeted ads in Europe.”

Peter Kofler – Chairman, Danish Entrepreneurs

“Startups at every stage rely on targeted advertising to some extent. In the earliest phases they use these tools to experiment, validate ideas, identify and reach early adopters. Limiting the toolset of these companies to find, segment and attract the right type of first customers makes them even more fragile. The ones that find product-market fit and transition to a growth phase at some point will need to put fuel on the fire. High growth companies with various business models need to use sophisticated and well-targeted paid acquisition channels that were engineered to reach their right customers at the right time. As a consumer you also want to see ads that are actually relevant for you. Banning or restricting targeted advertising with the DSA will surely limit startups and scale-ups in competing with their global counterparts and they will have a smaller chance of becoming those desired unicorns to supercharge the digital economy of Europe.”

Csongor Bias – Managing Director, Startup Hungary 

“Targeted advertising is the main tool that allows a startup to validate its value proposition and get into a market at low cost, optimising marketing expenses that – at initial stages – must be super efficient. Any limitation would be a barrier to market entry for new players in the economy, which could pose a direct challenge to the entire startup ecosystem, and would result in favour of incumbents and established companies that are protected from challenges by the legislator”

Gianmarco Carnovale – Chairman, Roma Startup 

“It is quite rare that an extreme measure, in any field of knowledge or economic area, becomes effective or constructive even in the long run. The possibility of severe restrictions or a complete ban on the use of targeted advertising is further proof of that: by fighting this format, the proposal ends up leaving a considerable part of small businesses and tech startups out of the game and without a clear transition plan – which will actually benefit any player in a dominant position. The challenge is, as always, a systemic one: we believe that it is possible to find a more considered decision, able to balance European Union interests and the needs of new economy players, whether digital-oriented or not.”

Alisson Avila – Communication & Knowledge Principal, Beta-i (Portugal)

“A ban on targeted ads would be counterproductive for startups. They use ads to reach a broad audience in an easy manner. In that way our members can compete with bigger platforms, creating new European scaleups, jobs and a strong startup ecosystem”

Rogier Klimbie – Head of Public Affairs, Dutch Startup Association

“Targeted advertising keeps the innovation in the B2C segment alive. It enables the innovators to stand on an equal footing with the established market leaders and to constantly challenge them. A market without targeted advertising will eliminate competition and therefore significantly reduce the quality of the services and products offered.” 

Yoan Petrov – Co-founder, RelaxifyApp

“For a startup with ambitions to combat climate change, targeted ads are key to validate a business idea, reach critical mass and scale. Without being able to precisely address our customers in our markets, Fra Frejø would never be able to to change the customer behavior in a more sustainable direction” 

 Thomas Hermansen – CEO & Co-founder, Fra Fejø

“We are a small start-up with a limited marketing budget. We use targeted ads to make that budget as efficient as possible. If this were to be limited, we would have no way of introducing our brand to new customers or the cost would be so high that it would be completely unaffordable. And, once again, big companies (with their big marketing budgets) would benefit. “

Maria Martinez- CEO & Co-founder, Laconicum

This is an open-ended list. Feel free to share your quote with us!