AAAA: The Future of Advertising Agencies

LET’S TALKWHAT WOULD WE DO IF WE WERE STARTING A NEW AGENCY TODAY?

AAAA DIGITAL CONFERENCE

MAY 28, 2008

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WHY ARE WE TALKING ABOUT THIS?

“THE AGENCY OF THE FUTURE DOES NOT EXIST”

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1979

ConsumerTechnology

1989

ConsumerMarketing

1999

Consumer Investing

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HOW DID WE GET HERE?

1989

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DESKTOP PUBLISHING

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INTERNET

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PORTAL

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SEARCH

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DVR

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BLOGS

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VIDEO

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SOCIAL GRAPH

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MOBILE

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WHERE ARE WE NOW?

VIDEO

BLOGS

MOBILE

SOCIAL RADIO

TV

NEWSPAPER

MAGAZINE

BILLBOARD KIOSK DIRECT

The Attention (Deficit) Generation

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WHERE DO WE GO FROM HERE?

BRAND CONSUMEROwn the Conversation

(not just the creative)

HELLO!HELLO!

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IT’S HOW WE GET FROM HERE TO THERE

(Reach x Frequency)Engagement

= Media Buy√

RECALCULATE THE MATH

Reach x Frequency = Media Buy

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A FEW IDEAS TO CONSIDER

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ENGAGE THE AUDIENCE

Invite . . . Ask . . . Entertain . . . Co-Create

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INVENT NEW AD UNITS: INTEXT

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BRAND/CONTENT EMERSION

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CREATE COMPELLING PROGRAMMING

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INVENT NEW AD UNITS: MEVERTORIAL

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INVENT NEW AD UNITS: PLAYBRANDS

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INVENT NEW AD UNITS: VCAM

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GET IN FRONT OF SEARCH

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BRAND CREATIVE MUST MATTER AGAIN

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INVENT NEW AD UNITS: PRODUCT AS HERO

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL %

Revenue

Operating Profit

Expenses

R&D

Manufacturing

Saleries

G&A

Operating Income

Taxes

Net Income

PERFORMANCE BASED COMPENSATION

Sales & Marketing

Cost of Sales

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WHICH AGENCY DO BRANDS NEED?

Own theCreative

Own theConversation

Production Oriented Portfolio is the AssetWork-for-Hire Target an AudienceInsertion OrdersRxF=Media BuyStandard Ad UnitsS&M ExpenseFee Comp. Partner

Strategic Oriented I.P. is the Asset.Subscriber Mgmt.Engage the AudienceProgramming & Apps(RxF)/E=Media BuyInvent Ad UnitsCost of Sales%Revenue Comp.Team Member

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kvamme@sequoiacap.com

LET’S TALK

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THANK YOU!