Kvamme To AAAA: Marketers Need To 'Own The Conversation'

headshot of Mark KvammeIf Mark Kvamme were starting his former ad agency CKS Group today, what would he do? Bypass the traditional interruption model of advertising and focus on "owning the conversation" among consumers using digital tools to shape their own media interactions.

In remarks at the AAAA Digital Conference in New York on Wednesday, Kvamme urged audience members to "think about how brands and consumers are going to interact" in a world where people can get media where, how, and when they want.

Advertisers and agencies need to be especially mindful of what he called the under-30 "attention" generation weaned on blogs, Facebook, YouTube, and a host of Web applications turning the 30-second spot into an old media relic.

"The key thing here is how do we invite, ask, entertain and co-create?" said Kvamme, now a partner at Silicon Valley venture capital firm Sequoia Capital Partners. "If the consumer doesn't like what we're giving them, they'll click off immediately."

To that end, he stressed the importance of creating new ad units that blur the conventional boundaries between content and advertising. As a high-tech venture investor, Kvamme explained he has a front-row seat to glimpse some of the most promising digital media and ad concepts coming along.

Among innovative new ad formats, he pointed to the comedy video site Funny or Die, which lets visitors create their own movie trailer spoofs incorporating footage from new releases. (Kvamme's son, Michael, came up with the site's underlying concept for surfacing funny videos.)

Another Sequoia portfolio company, StarDoll, has made millions by selling "Playbrands," branded digital clothing and other items the site's tween and teen users can buy to outfit their virtual dolls, Kvamme said.

He also showed the potential for display advertising within search by demonstrating some of the capabilities of visual-oriented search startup Searchme. Looking up the HBO series "Entourage" on the site, he collected photos, a video clip, and a Wikipedia entry on the show, among other pieces of related content that could be stored for later viewing or shared with friends.

"This could put the creative back into search," said Kvamme. "(Text-based) search makes it really hard to be creative with 95 characters."

Kvamme added that he's especially interested in blogs, saying he gets most of his news from a half dozen or so mostly tech-focused blogs. "They allow consumers to interact with each other and people are getting audiences in some very interesting areas," he said. Finding ways to tap into highly targeted niche audiences online will be a key challenge for agencies and brands to tackle.

As an unlikely motocross enthusiast, Kvamme pointed out that he belongs to an online community dedicated to the subject.

A related morning panel at the AAAA Digital event at the TimesCenter auditorium looked at business models among digital agencies. Compensation was a central topic of discussion as agencies consider new ways of getting paid that reflect the newer types of interactive campaigns they are developing for clients.

While experimenting with new payment methods, including pay-for-performance arrangements, the executives gathered indicated that they are mostly sticking with traditional approaches to agency compensation to keep things simple.

Matt Anthony, CEO of WPP-owned VML, said the firm works mostly on a retainer basis across its creative, technology and media buying and planning operations. Likewise, Winston Binch, vice president, integrated head of interactive production at Crispin Porter + Bogusky, said the agency typically charges an upfront fee for oversight of a campaign across media, but charges separately on an estimated basis for various production elements.

"That way we can adjust ideas and thinking quickly," Binch said. He noted that Crispin Porter had taken equity stakes in clients in lieu of standard fees in some instances in the past, but found the approach too risky.

Joe Celia, chairman and CEO of G2 Worldwide, also suggested that performance-based payment methods tied to digital campaign metrics can erode the perception that agencies have valuable services to offer. By reducing the differences among them to price, agencies risk becoming commoditized. "Our focus is on how to maintain the value perception for clients so they're willing to pay," Celia said.

The panelists also expressed skepticism about outsourcing production work to reduce costs. While VML has outsourced some technology chores to India and other regions outside the U.S., the savings isn't always worth the loss of control and oversight, according to Anthony. "Clients are paying us to deliver on our ideas and the execution is ultimately what the customer sees," he said. "You still need project management and relationship people to make sure those things happen."

In that vein, Binch pointed out that in two-and-a-half years Crispin Porter has gone from sending out 90% of its production work to handling half of it in-house. "This allows us to get technology at the front of our conversations," Binch said. "You have to have technologists in your own conversations--they have to be leading, even in the creative department."

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