Dive Brief:

• Independent ad agency Decoded Advertising has launched its own direct-to-consumer (DTC) brand, according to news shared with Marketing Dive. Called 42 Birds, the e-commerce business focuses on sustainable yoga products that are made of cork, with three available at launch: a yoga mat, block and what the company claims are the world's first cork massage balls. They products are available on Amazon and at 42Birds.com.
• Decoded created 42 Birds to capitalize on the growing health and wellness industry and also get a better handle on what it takes to handle manufacturing, marketing and more for a successful DTC brand. Day-to-day operations for 42 Birds will be run by Decoded's Chief Innovation Officer Addie Conner, who formulated and incubated the idea with CEO Matt Rednor.
• Founded in 2014, Decoded is a creative and media agency with offices in New York City and Los Angeles and clients including Visa, T-Mobile and Booking.com. This isn't the shop's first dip into the DTC space: Its first client was Dollar Shave Club, which was purchased by Unilever for $1 billion in 2016, and it previously worked with BarkBox and Honey as well, per Campaign.  

Dive Insight:

It's unusual for an ad agency to create its own standalone brand, and the 42 Birds news signals that companies like Decoded are having to think outside of the box to keep their finger on the pulse of emerging consumer trends. Decoded also said that the initiative comes as a response to the growing push by marketers to bring more agency work in-house. The ANA last month published a report that found 78% of its surveyed members are working with some form of internal agency, and that those teams are taking on more significant marketing duties.

"Agencies are disconnected from a substantial part of a client's process of coming to market and the balancing act between sales and marketing," Rednor said in a statement. "Going through the same process clients go through will help us better consider the recommendations we make."

The venture is interesting for a few other reasons: If 42 Birds picks up traction, it could be an additional source of revenue for Decoded at what is broadly a tough time for growth in the agency space. Decoded can additionally take insights it gleans from running 42 Birds and use them to inform strategies with its other clients.

Traditional brands across categories are being disrupted by DTC startups, which are viewed as having greater agility with digital marketing channels, supply chains and e-commerce. The rollout of 42 Birds follows closely the IAB's first Direct Brand Summit, a conference that brought together not just disruptor brands, but also legacy marketers from companies like L'Oréal and Johnson & Johnson.

The decision to sell 42 Birds on Amazon is also telling in terms of how marketers are looking to drum up interest for new brands in the digital age. Procter & Gamble's Old Spice, for example, launched its first-ever beard care collection as an Amazon exclusive last month.

"Selling our own product, designing the UX, search strategy and handling the supply chain will allow us to learn e-commerce — and Amazon especially — better than just managing a campaign for a client," Conner said in a statement around 42 Bird's launch.

"It's the private label sellers, the affiliates and the underground brands of the web that are truly driving innovation," Conner added. "This way of operating needs to be learned, understood and then applied in a way that can scale."