CourtAvenue, launched earlier this year by Rockfish founder Kenny Tomlin and former Mirum global CEO Dan Khabie, is growing its footprint.
The agency announced its first acquisition on Friday, San Diego-based social media agency Modifly, which works with clients including Nordstrom and Mercedes, as well as DTC brands such as Fancy.com.
Modifly was founded by recently named Forbes 30 Under 30 honoree Elijah Schneider in 2015, when he was 19 years old in his Cal State dorm room. The agency does content strategy, creation and media management, including working with influencers, on digital and social channels.
CourtAvenue CEO Michael Stich, who left WPP in October to join the startup, described Modifly as “our engine by which we generate awareness, engagement and activation” for clients. The 20-person team will fall under CourtAvenue’s professional services division.
“[Modifly has] been able to build an effective and efficient engine for people to generate awareness within a variety of social channels,” he said. “We’ll be able to offer clients a transparent way to use media.”
CourtAvenue was launched in January as a new kind of holding company that leverages technology partnerships and investments to deliver for clients. Reimagining how to deliver marketing services is necessary as a new wave of technology comes to prominence, from 5G to artificial intelligence, Stich explained.
“It's a good time to think about how these technologies change business and, as a result, business models and communication,” he added.
CourtAvenue’s go-to-market falls under four pillars: strategic consulting, rapid proof-of-concepting, platform integrations and marketing sciences. In addition to charging on the typical time and materials model, the group leans heavily on strategic partnerships with tech platforms that allows it to build bespoke technologies for clients, which it can also sell as IP.
“For example, a client might need an architecture that brings together brick-and-mortar and DTC commerce,” Stich explained. “We might develop IP from that, which we can monetize and sell to the market.”
For CourtAvenue, tech partnerships can extend beyond the typical vendor relationship. For example, sometimes the agency will enter a joint pitch with a platform or create a bespoke joint service offering to deliver on a specific need for clients. In these cases, the two companies work together on a revenue-share model.
Modifly will serve as the engine that brings some of this unique IP to life through marketing, Stich explained. CourtAvenue is also looking at other investments in machine learning companies in the healthcare and education spaces.
“We look at Modifly as the go-to-market portion,” Stich said. “As we build something, that's the activation engine on top.”
As CourtAvenue grows its team and its investment portfolio, it will bring together small, agile teams from across the group to solve specific client problems. If desired, clients will have the opportunity to take these teams in-house as a joint venture.
For Stich, a big strategic focus will be to help clients across sectors move beyond the old school CRM and loyalty models to embrace subscriptions as e-commerce becomes more saturated.
“If certain [customers] are already spending $30 to $50 a month with you, find a subscription model that gets them into autopilot and move into a new type of loyalty program,” he explained.