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News Plus 24 Jun 2021 - 5 min read

War chest: Ex Publicis, Clemenger CEOs lead Mutiny investment round to scale automated econometrics, $1bn media pool to prove which marketing is working

By Paul McIntyre & Brendan Coyne

Martech firm Mutiny has landed a capital injection from investors including former Publicis and Ogilvy CEO Andrew Baxter and ex-Clemenger CEO Nick Garrett to scale its cloud-based econometric modelling platform – locally and then globally. Co-founders Henry Innis and Matt Farrugia are aiming for 200 per cent growth and a billion dollars under management in 12 months by showing marketers what's working, and what's not, in real time.

What you need to know:

  • Up to a dozen blue chip brands have signed on to Mutiny’s WarChest automated econometrics platform – built as a Software as a Service (SaaS) licensing model.
  • Mutiny’s founders and investors say WarChest is already disrupting human-led econometric modelling from consultants and agencies.
  • WarChest’s current $300m media pool will surge to $1bn next year as more large brands sign-up to their own real-time feeds on which media and marketing channels are delivering incremental growth over baseline sales.
  • Founders say the platform is delivering CMOs new-found credibility with finance and leadership teams because they can demonstrate business impact from marketing investment almost immediately.
  • Finance teams who are using WarChest are seeing robust evidence to treat marketing as an investment, not a cost.
  • Performance marketing is a key area under the spotlight – essentially it has been attributed to generating sales that would have happened anyway. 

We’re getting CFO’s attention because all of a sudden the CMO is able to speak with financial literacy, the language the CFO and their financial revenue managers need to be able to assess those investments in marketing.

Matt Farrugia, co-founder, Mutiny

Mutiny, the martech venture formed by former Y&R execs Matt Farrugia and Henry Innis, has raised capital that gives the firm a pre-money valuation of $12m in a bid to scale its WarChest marketing measurement platform and give CMOs the ability to prove marketing’s contribution to the bottom line.

With blue chips such as Asahi, insurers and banks already on board, the firm aims to triple its footprint to encompass a $1bn media pool within 12 months. Co-founder Henry Innis said the company then plans to go global, in step with global clients.

Investors include former Ogilvy and Publicis CEO Andrew Baxter, now Chair of Australian Pork plus various other advisory roles, and former Clemenger CEO, Nick Garrett. Both are convinced that Mutiny has stolen a march on agencies and consultancies perhaps too focused on billable hours to crack automated econometrics.

Both are equally convinced that their minority stake will deliver significant returns as WarChest resolves the old Wanamaker conundrum of knowing which half of the budget is working, and which is wasted.

CMO meets CFO

Most martech platforms are focused on personalisation, said Innis. “None are asking 'how do I help the CMO make a better decision around the money that they're investing’. And that's where we saw the market opportunity.”

Now Innis and co-founder Matt Farrugia are bidding to embed econometrics into marketer workflows so that they have immediate, up-to-date marketing investment analytics and can generate econometric models “in hours, not months”, said Innis. They are targeting CFOs as well as CMOs.

“We’re getting CFO's attention because all of a sudden the CMO is able to speak with financial literacy, the language the CFO and their financial revenue managers need to be able to assess those investments in marketing,” said Farrugia. “And that's been incredibly powerful.”

Which is why the platform has quickly scaled to manage a marketing investment pool of $300m, and why Innis is confident WarChest can oversee a billion dollar investment pool by July 2022.

“I don't think there's a single marketer that wouldn't want to present the return of what they're doing regularly back to the boardroom. Because one, they will look pretty good, and two it positions them as someone who is contributing to the bottom line, rather than adding cost to the bottom line.”

Traditional econometric modelling used to take about three months to do, and it was usually a once in every three to four year moment in time, based on maybe three to five years prior data. That information, in real time, is gold.

Andrew Baxter, Chair, Australian Pork

Growth versus wastage

With early success in sectors such as insurance, banking and CPG, Mutiny is now eyeing the retail sector, touting sharper insights into aspects like baseline sales – sales that would have happened anyway without media and marketing spend.

That kind of information can make a huge difference to marketing strategy, said Innis. He cites a client in the financial services sector:

“They were going really hard on performance channels. But when we analysed the sales compositions, it had not driven much incremental growth. They were bidding on sales that would have happened anyway – and it was actually the brand building activity that was contributing a lot of growth,” said Innis.

“There's this great myth that brand building campaigns don't generate sales. You can almost immediately see good ones generate sales. It's just that they're not in the click economy. So they're really hard to track.”

“We've got into a frenzy over the click economy, it's creating some numbers which might not be as true as they seem.”

Andrew Baxter thinks arming marketers with the ability to avoid wasted spend is one of the reasons that WarChest will quickly scale.

“Traditional econometric modelling used to take about three months to do, and it was usually a once in every three to four year moment in time, based on maybe three to five years prior data,” he said. “That’s a huge amount of data, but it was already out of date – especially if you think about the context of the last 18 months. That information, in real time, is gold.”

Baxter, a senior adviser to KPMG and Adjunct Professor of Marketing at Sydney University, thinks WarChest is “disrupting media strategy as we have known it.”

Nick Garrett thinks that is good for brands, media and creative agencies.

“The fact that clients have more capability to feel confident in strategic decisions they're making is good for everybody. To be able to have access to important data in close to real time, to be able to influence bigger business decisions, everybody wins.”

It’s pretty hard to build a product when you’ve got billable hours to fill. But you couldn't have built it three years ago [anyway] because there were a lot more limitations on the cloud, which was nowhere near as sophisticated as it is today. It was cost prohibitive.

Henry Innis, co-founder, Mutiny

Billable hours trap

Yet if everyone wins, why haven’t agencies or consultancies with deeper pockets and greater resource built out similar functionality?

“It’s pretty hard to build a product when you’ve got billable hours to fill,” suggested Innis. Farrugia, a one-time Qantas avionics engineer who spent more than a decade at both networked and independent agencies, agreed.

“I always had the ambition to do this. But it was impossible because [agencies were] purely obsessed with the billable hours to cover the headcount and resources. It just went against what they did. There was too much money to be made from those hours.”

In fairness, said Innis, technological limitations would have prevented earlier attempts to create a WarChest variant.

“You couldn't have built it three years ago because there were a lot more limitations on the cloud, which was nowhere near as sophisticated as it is today. The costs were higher and therefore the cost to use machine learning to execute with automated functions was virtually impossible. You just couldn't do it. It was cost prohibitive.”

But that is no longer the case – and it’s why Innis, Farrugia and their investors are confident in delivering 3X growth within 12 months via a license-based model.

“We think we can do that, bearing in mind that pool covers total marketing spend and things like pricing decisions and rebate decisions as well," said Innis. "So we don’t just look at the pool as media budgets.”

Are there any impediments to growth?

“One is whether clients have the data [to feed the platform] or do they organise it in the right way. That can be pretty challenging for some businesses,” Innis admitted.

“The second challenge is that, if you look at budgets that have been set out, is there a line item for this sort of platform yet? Probably not. But there should be, because it pays for itself very, very quickly.”

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  • All retailers are eyeing media, not just supermarkets and FMCG.
  • Mi3 supported by Resolution Digital have produced a 28-page report with cross-industry views on what you need to know.

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