Warby Parker filed an IPO last week, another indication that direct-to-consumer (DTC) is a hugely powerful e-commerce trend. But LA-based performance marketing agency MuteSix didn’t wait that long to build its business to grow DTC brands.
Created in 2014 and acquired by Dentsu in 2019, MuteSix was recommended to by Rhoda Ullmann, VP Consumer at Sense, a Boston-based startup that manufactures home energy monitors. “They display best-in-class expertise with Facebook and Google paid ad platforms. They have a very smart and efficient approach to creative development which was key to helping us scale up,” she wrote. (If you have growth marketing agencies or freelancers to recommend, please contact us. Fill out the survey!)
In addition to Sense, Mutusix’s former and current customers include companies such as Adidas, Petco, Ring and Theragun, to whom it provides a full range of marketing services, including top-notch direct response videos. But regardless of whether you can afford it, we think you’ll learn interesting lessons from our conversation with their CRO, Greg Gilman. Key takeaway? In today’s highly competitive advertising environment, both content and data are king.
Editor’s Note: The interview below has been edited for length and clarity.
What can you tell us about MutSix as an agency?
Greg Gilman: We have been around for nine years. We started out as a Facebook advertising agency – unlike a lot of agencies that start out by saying they do everything, we decided to focus on what we were really good at. At the time, it was doing Facebook media shopping for e-commerce companies. Mainly here in LA, which is the hub of these companies, but also a whole lot more. And then gradually we grew the organization.
At the moment, we’re a little over 400 people, and we manage over $500 million in spend on Facebook and Google, including Instagram and YouTube. We have become a one-stop shop for DTC e-commerce companies: We manage all the channels that a DTC brand needs. And we are a performance agency; Everything we do is based on results. People come to us to increase revenue in their e-commerce businesses.
Why do you think performance marketing is a good fit for DTC?
DTC entrepreneurs tend to focus more on immediate impact, because if they are not selling the product, no major brand is pushing them. So I think you need to be more performance focused to do DTC marketing. For agencies working with big brands, it’s usually more about impression buying versus performance shopping. They might say: I did a reach campaign today to hit 10 million eyeballs, and whatever happens, because at the end of the day, you told us to do 10 million impressions. This is different from working with a group like ours trying to optimize every little piece of the funnel, and be accountable for generating as much sales or revenue as possible for the entire funnel.
What type of clients do you work with?
Most of the companies we work with are digitally native DTC companies. We’ve mostly been in that street, because we’re really good at it. That being said, we work with companies of all sizes – startups, already established companies, and very large companies that need to rework both their creative and media buying strategies.
I oversee sales, marketing, and partnerships, and my role is really trying to figure out which brands matter most to partnering with MutSix. We’re looking for high-growth brands that we can scale to, and we’ve learned over the years that what works well are performant products that have good user value.
We have worked with a lot of startups at various points in the funnel, starting from scratch and with them through various rounds of funding, all the way through acquisitions, including two by Unicorn. But these days, the ground up is tough. I like that they have some proof of concept – going through $10,000-$15,000 a month on Facebook or $5,000-10,000 on Google usually lets me know there’s some life in it. But I don’t want to limit us if it’s a good idea. I talk to a lot of people who hold back once they’ve proven it a bit.
Have you worked with a talented individual or agency that helped you find and retain more users?
answer our survey And help other startups find top growth marketers they can work with!
What types of customers are definitely not suitable?
If there is no true unique value prop for the product it will not fit. If it’s just another run-of-the-mill company, a consultant might charge them a smaller amount and set up Facebook ads, but what we’re looking for are high-growth businesses.
Compensation for our campaign managers is really tied to the performance of the campaigns, so if I bring in a bunch of campaigns that we can’t scale, we’ll have a lot of unhappy media buyers who ask: “Greg, Why would we take this brand?” It’s a business model that has helped us attract top talent, but we need to make sure we’re bringing in brands that we think we can scale.
And while it’s easier than ever to start a company, it’s harder now to scale it and take it past that $2 million-$3 million run rate. That’s why I always ask founders: What are five reasons people want to buy your product? What are five reasons they don’t? If the entrepreneur has trouble answering it, it won’t work. If they can’t tell anyone why their business is good, we won’t be good at selling it.
How is MutSix different from other agencies?
I would say the main difference is that we have a 70-person in-house video creative team; And what we are really good at doing is shooting and coming up with performance material. Not only content that looks and feels, but reverse-engineered video to sell the product.
Another important component is that we have an exhaustive data science team that is also integrated with our media buying team, and that helps companies navigate things like attribution and signal loss due to the iOS 14 update. Right now, that means focusing on seeing the whole picture instead of the channel, and working on mix-modelling attribution.
What does your data team focus on?
One of the biggest things brands struggle with is figuring out attribution, and how you continue to spend money, even if you’ve lost some of the signal in the platform. If Facebook leans in too much, and Google is on the last click, it can sometimes feel like things are never working out. To help companies make informed business decisions, we are building statistical models that show a high level of information from the platform.
We are also building better segments of customer profiles that help customers understand who their main audience is, but also help us build a predictive audience to find new people.
Another big thing we’re trying to solve is incrementalism. We work with big brands that have a strong organic following on social media; And his question is: “Hey, Greg, why should I spend more money if I’ve gotten those users anyway?” That’s why we’ve done incremental testing with brands that spend a lot in channels other than Facebook and Google. We helped them create different ways to look at the data so that we continue to spend in those channels and they really know the incremental growth they’re getting..
There is another piece that I think is very important and commonly overlooked: first-party data. We work with brands and try to get as much first-party data as possible, split it up and use it, because that’s what they’ll have if Facebook shuts down tomorrow.
How do you prepare and adapt to changes in the marketing ecosystem?
Because we work with so many brands, we have a lot of senior leadership at every channel level. We regularly meet across departments and share insights. The data science team also builds pretty strong reporting. We try to stay ahead of our brands and be forward-thinking about anything that is ultimately going to impact the agency. We’re constantly trying to hack our way through things like the types of content that work and the things we know will help us scale.
That’s how we’ve always approached it. Every major change in our business was made to meet the needs of the brands we were working with. For example, there’s a data side to our business because using it is more important than ever. Facebook used to be a platform where you could throw anything at the wall, and you would get 4x or 5x returns. When you’re really printing money from Facebook, no one is asking about the data, right? This happens only when the margin gets tight. But then Facebook became a more crowded platform, and so did Google: more advertisers, higher CPMs, and a more competitive environment. We needed to be smart about what we were doing, so we built our data team.
Now there are two levers we can pull: the data side and the creative side of the business. Again, we are a performance marketing agency with a focus on all levers. Because platforms like Facebook are only going to get more competitive, they’re only going to get more expensive, and we’re only going to lose more traffic. So more agile agencies have to think far beyond what we’re doing on these platforms; Because we’re going to be building incremental revenue on things like SMS, influencer marketing and organic content to continue to drive money at the top of the funnel.
Why is your content arm so important as a lever?
We have an integrated solution where our media buyers are paired directly with our video editors and producers to enable us to be agile and fast; Because as everyone knows, content is king. What we try to do is optimize around what we on Facebook call the thumbs-up rate – three-second video views. If I kept someone in their newsfeed long enough, I could potentially bring them into my flow. We do the same thing on YouTube, and we do stuff like this on programmatic, because the name of the game is to funnel people and work through them. And we’re using both our data science team and our creative team to build and optimize on the front end of these accelerated metrics to drive things forward.
In my opinion, an SMB agency like no other has a content branch like we do. Leveraging our content team to create performance content is one of the biggest leverages for us. Three and a half years ago, Facebook was telling us: “If you don’t create video content, and if you don’t prioritize video in Newsfeed, it won’t work.” At the time, we hit hard—and the pain of growing a creative team of 70 people is real, especially in LA. But it has allowed us to scale our agency.