Dentsu Inc. has agreed to acquire the direct-to-consumer marketing agency MuteSix, as the agency holding company looks to forge new relationships with emerging brands.
“I see this as being a way to diversify our client base, but not just diversify with clients that always have to have these enormous budgets,” said Jeremy Cornfeldt, chief executive at Dentsu digital agency iProspect, which will house the acquisition.
The idea is that when the shop’s smaller clients gain traction, they can plug into Dentsu’s agency network and consider marketing their brands beyond just social media, he said.
Japanese ad holding company Dentsu owns media agency Carat and marketing shop 360i, among other large agencies.
Direct-to-consumer brands that don’t rely on retailers to sell their products, at least at first, are increasingly popular and have leaned heavily on digital platforms like Facebook and Google to raise awareness. Madison Avenue is racing to get a piece of the action as many of these companies mature and expand their marketing budgets.
Agencies are also looking to diversify their client rosters as many advertiser clients cut back on agency fees or push their shops to create online ads more efficiently.
Los Angeles-based MuteSix touts about 120 employees and 270 clients, many of which are smaller than iProspect’s clients, said Mr. Cornfeldt.
The four-year-old shop’s revenue in 2018 was around $17 million, according to a person familiar with the matter.
MuteSix works with the founders of small businesses, who might task them with making sure that product inventory levels can sustain a successful marketing push on Facebook, for example. That kind of access and experience gives the shop insight into which products tend to survive and fail, Mr. Cornfeldt said.
“There’s a lot to be learned and gained when you can work with these types of companies when they’re just starting out,” he said.
The shop, which has worked with direct-to-consumer clients like home-security company Ring Inc., scooter-rental service Lime and meal-delivery company Daily Harvest Inc., along with more traditional marketers such as the National Hockey League, has a business model that allows it to support a high volume of clients simultaneously, Mr. Cornfeldt said.
MuteSix operates in pods, with employees assigned to levels of seniority instead of traditional titles. Each pod works with a handful of clients. The most senior-level staffer within the pod is responsible for its financial performance.
“Their structure has allowed them to take clients in more volume,” he said.
Read the original article from the Wall Street Journal here: https://www.wsj.com/articles/dentsu-to-buy-marketing-shop-mutesix-in-a-bid-for-startup-clients-11567011600