Marketing Wisdom from a VC

When Venture Capitalists start telling marketers to change their business model, it’s worth taking a listen. Last week Advertising Age ran an interview with Mark Kvamme, who is in a unique position as a former ad guy who now works at Sequoia Capital. Sequoia is one of the most successful VC funds in recent history and the bucks behind hits such as Google, YouTube, and Cisco.

I found two really interesting perspectives from Mark Kvamme. First, he suggests that advertisers need to think “beyond the current buying mind-set of reach and frequency and connect with people through engaging experiences.” Ironically, Sequoia has backed companies, such as YouTube, that are attempting to make money today by selling reach and frequency to advertisers. So even a few VCs see that digital marketing - and marketing in general - needs to shift to a new model for what Kvamme calls “the attention-deficit generation.”

The second interesting point is that Kvamme goes on to wonder why marketers are not doing more to generate content on their own. He says:

“The thing I don’t quite understand about agencies and brands is why they don’t go back to the 1950s and create their own content. At the early age of this new technology called television, they created General Hospital, they created the soap-opera phenomenon, game shows. Why aren’t they doing that on the net?

Part of [the reason] is the marketing guy is risk-averse. They’re not venture capitalists… To me, they are the fuel that makes this stuff happen and they should be participating at a bigger level.”

I think Kvamme answers his own question well when he suggests that marketers are risk averse. We see this all the time from the agency side as clients are just not comfortable making significant wagers on content. They want to get their product, price, placement, and promotion right; this is what they’ve been trained and promoted on since the 1950s. Habit change is extremely hard, and moving to a world of marketing a service, a utility, or a cause can feel like a new career.

A meaningful marketing mind-set may help our industry both back away from reach/frequency and embrace engagement/content. Once we think about how our communications can improve consumers’ lives, it’s not much of a stretch to get back into the content game.