Editor’s Note: I usually send this email on Tuesdays. But I was thinking that it was Monday all day yesterday…so I didn’t send it. See you again on Friday!

I think the first time I came across Common Thread Collective was in 2018 or 2019, and I remember being struck by what was on their homepage:

Over the years they've changed an extraordinary amount, and in some ways not at all. They've changed the kind of brands they work with, the scale of impact they have, and the way they talk about the benefits of working with them. But in so many respects, this idea of a formula has been consistent. And that consistency has nearly turned CTC into a category that is somehow part of, and different than, agencies.

Taylor Holiday, CTC's founder, tried to make his agency a category of 1. (Editor’s Note: I know Taylor glancingly and have spoken to him a few times…this teardown isn’t influenced by any of that…)

He created his own acronym - SEAN, the Software-Enabled AgeNcy. IMHO, the N is a bit of a try-hard there…but whatevs… He coined the term, he talked about it on podcasts, and wrote the manifesto. But, I'd bet real money his own team never uses the term unironically. Can you imagine? “Hey Mom, guess what I did after school today - I founded a SEAN!”?

In 2018 CTC was selling math. It turned success into a middle school pre-algebra equation. It's a clean pitch. It’s simple - there’s no “We do special agency magic!” claim. (For those of you who don’t remember, agencies used to sell on the strength of their “proprietary process” or “partnership with [Insert Name of Platform Here]” - none of that stuff was ever truly client facing, so the basic agency sales message was “we do magic that you can’t”.)

Prophit, the thing CTC sells now, is that formula distilled down into the essence of what their clients need. Revenue got demoted while contribution margin, cash, and forecast accuracy got promoted. And the pitch changed from "more traffic equals more sales because math" to something much harder to copy: “We understand ecommerce so well that we refuse to optimize for stupid numbers like ROAS and CTR, and we will turn your marketing into free cash flow for the business.”

(It probably doesn’t hurt that Taylor & his team operated a few DTC brands for a while and started to truly understand what an ecommerce marketer truly values from all aspects of the business.)

In 2018 the buyer was paying for the simplification of marketing - easily understood metrics in and an easy to understand metric out. Now the buyer is making the choice to work with CTC based on how well CTC can articulate the needs of the business and point to the impact CTC has on the client’s business.

CTC is capturing the yield of their Return on Understanding. The agency understands the buyer's P&L, the buyer's board, and the buyer's bank account as well as (or even better than) the primary buyer does.

This position - where CTC is thinking INSIDE the client business - is in direct comparison to the “extension of your team”, “data-driven”, “ROAS focused” messaging of most agencies.

But more than just understanding how media spend and resulting profit impacts a business, CTC takes the Prophit approach and make it part of their organizational fabric. There isn’t a Head of Paid Media at CTC, there is a Vice President of Media Investment. And because CTC is treating media like an investment, they build public data, and generate reports with proprietary data, like their Meta Cost Controls Report. CTC definitely has made a significant investment into their data analysis (they have a subscription product, Statlas, that monetizes their data prowess), but that investment makes sense because of their decade long focus on formulas ((V x CR x AOV)= Revenue), to data aggregation (The DTC Index) to the Prophit Engine. It is a clear evolution from “here is the formula that we use” to “Direct to Consumer Brands have different needs” to “marketing is an investment activity where returns are tracked & reinvested”.

"When I think of revenue, I think of Attio." - Shreman Shrestha, Head of Business at Granola

Here's what that adds up to:

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CTC attacks sales objections from the core of its positioning. For many prospects, the complexity and data requirements of effective digital advertising are outside of their expertise, so every agency with a convincing sales pitch sounds credible.

Outside the agency sales pitch, when a decision maker or purchase influencer is outside of the agency's reality distortion field, they often have to answer questions about their enthusiasm for a particular potential partnership, like “How do we know this is going to work?” or “What makes these people different?” or “How do we know this is actually helping us accomplish [whatever strategic goal the prospect has]?”

CTC seems to invite analysis by non-marketers. They de-risk their sales pitches by doing things like having a virtual CFO Summit. They attack obstacles by understanding the risks a prospect might feel and providing insight and evidence that teaches the prospect how to make quality decisions…

Fuck no.

CTC doesn't win every deal, and they've been through their ups and downs just like anyone else. But I wanted to talk about CTC because they have evolved their positioning in a way that isn't about their advantages or disadvantages versus other agencies, but their positioning is directed towards helping their market make a vendor choice where CTC has a nearly unbeatable advantage.

By skipping the traditional "we make better creative" or "we understand your audience," which appeals to marketers. CTC has turned their value proposition into something that lives with equal clarity as a P&L statement.

They have sharpened their positioning such that the benefit of working with CTC is clear not just to the marketer, but to the finance team, to the tech team, to the executive team, because they are changing the things that they are judged on from return on ad spend and conversion rate to contribution, free cash flow, and metrics that are more universally understood and applicable because people see it in their budgets. They take away the fear that growth and profit aren't connected. They take away the fear that spending more in media generates revenue but not immediate company benefit.

Perhaps even more profoundly, CTC changes the choice from strictly a CMO or marketing decision into a management team decision once CTC expresses that its benefit manifests itself in margin contribution. It expands the decision-making surface area. CTC isn't selling to VPs of eCommerce or Heads of Growth. Instead they are selling to everyone in the C-suite (CEO, CMO, CFO, CTO, etc.). They enhance their win opportunities by using the language and metrics that non-marketers value & understand alongside the traditional marketing value props. This is genius, IMHO.

CTC probably isn't executionally better than your agency is at what you do. What they are doing is changing the landscape so that their competitive set can't answer the same questions that they can. Consequently, CTC eliminates both the client's feeling of risk, but they also make the likely competitive set of agencies feel somewhat riskier than they are.

They are framing their advantages into something that defies comparison on pricing, outcomes and capabilities decks.

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