Digital think tank and research consultancy L2 is looking to corner the market on prestige brand and CPG strategy.
A new investment round of $16.5 million from General Catalyst Partners (a HubSpot investor) received Wednesday also underscores the intersection of the management consultancy and digital agency.
“The two primary buckets for this investment will be for technology, since we want to increase our ability to deliver more information across more regions in a more robust way,” said L2’s founder and CEO, Scott Galloway, a clinical professor of marketing at the New York University Stern School of Business. “We [also] plan to have a dozen people in Europe by the end of the year, and some people on the West Coast and in Asia. We see an opportunity to be disruptive to traditional strategy consulting, which is about a $25 billion market.”
Paul Sagan, a partner at General Catalyst, has joined L2 as non-executive chairman. Larry Bohn, managing director of General Catalyst, has also joined the board.
Galloway began the company four years ago when he saw a commercial opportunity from data that arose from a research project at NYU in which Galloway and his team applied 850 data points to rank 100 brands’ digital footprints.
“We started in ‘prestige’ brands with L2 because we saw a digital revolution was coming to the luxury space,” Galloway said. It was also an area underserved by traditional management consultancies, which had strong clout in verticals such as financial services.
“We’ve since expanded into CPG, and four years since our founding, our customers now include P&G, Unilever, Hyatt Hotels, Four Seasons, Chanel, and the list goes on from there,” Galloway said. “We’ve now been tracking about 5,000 brands for four years across those 850 data points. We believe we’ve collected or assembled the largest data set on consumer brands online performance than has ever been collected by an organization that came from academic roots.”
Galloway said L2 is similar to a management consultancy because it helps brands and clients prioritize and allocate capital around digital initiatives. The major difference between L2 and a more traditional agency, he said, is because the firm was grounded in academic process, it would avoid the obvious ramifications of an agency one day deciding to rank its clients and compare them to their competitors. L2's roots in brand benchmarking, he said, "sort of gave us a little bit of an unnatural barrier of entry to this because we started with that history of benchmarking."
Still, L2 offers what it calls subscription business intelligence services, through which clients can download research PDFs or sign into an online portal, where L2 actively tracks and reports how a brand is performing digitally relative to its immediate peer group in prestige.
Categories include brand performance in mobile, digital marketing, social, site and ecommerce presence. There’s also a human services component, as L2 acts as a strategic consultant in brand briefings and hosts 50 vertically focused events per year. The company also is developing in-store shopper marketing and fulfillment efficiencies components to its services.