Traction pulls ahead

San Francisco Business Times just published this article on Traction. You can read the original here.

Ad firm Traction's software supports creative side

As far as Adam Kleinberg is concerned, there are ad agencies and there are software companies. Traction Corp. is one of the few that blurs the line between the two.

“We work across integrated branding and advertising, interactive experiences and social media to create experiences and align human behaviors with the brands,” said Kleinberg, founder and CEO of San Francisco-based Traction. “We’re as much a software development company as we are an ad agency.”

This model of combining advertising principles with web applications has worked for Traction. Over the past three years, the company has grown 105.5 percent, to $3.7 million last year from $1.8 million in 2006.

Illustrating this is a campaign the company created for Adobe in 2008 that involved a Facebook application that allowed users to guess if an image was an original or modified using Adobe’s Photoshop software.

“They wanted to reach out to the college student audience, so we created a game called ‘Real or Fake’ that leveraged images created with Photoshop,” Kleinberg said. “It provided a really successful brand engagement for Adobe’s customers.”

Kleinberg said the company tries to align a brand’s business objectives with human behavior through something it calls “engineered marketing.” The traditional marketing that had audiences move from awareness to consideration to intent to purchase doesn’t work anymore because “consumers can consume media on their own terms,” Kleinberg said.

The company’s blend of traditional and interactive ad experience led to an identity crisis early on, said Kleinberg, who has a web design background. “Were we a web development agency or an ad agency?”

But Kleinberg and the company’s other founders, Theo Fanning and Paul Giese, who all worked together at Tribal DDB before founding Traction in 2001, decided they were both and decided to combine the two.

The lines were blurred further when Traction was hired by Bank of America to create an Internet application that allowed customers to engage with the BofA brand while investigating their personal finances through the bank’s web site.

“It was truly different from anything the bank had ever done before,” said Tim Brown, who was creative director for Bank of America’s e-commerce division. He has since moved to a similar position with Kaiser Permanente.

“Instead of just taking what we thought would be a good idea, they really went to town and did great research on how people view their finances,” Brown said.

Kleinberg said 2008 was the company’s best year, and despite a tough beginning to 2009 he expects the company to come out of the recession stronger.

“At the beginning of this year, we had two months where most of our clients froze and we were very touch and go,” Kleinberg said. “But things quickly picked back up and we’ve grown quite a bit this year.”

Kleinberg said that through the third quarter, the company was on a path for more than 40 percent growth compared to the same period last year, despite the lull. He said the recession has made the firm focus on companies that value their brands, choosing clients more selectively.

As a manager, Kleinberg has learned that the most difficult aspect of managing the firm has been hiring good people.

Traction has grown to about 30 employees, with 12 of them joining in the past three years. Kleinberg estimates that he will hire about 10 more in the next three years. He said he took one of the company’s biggest risks when he decided to keep a particularly cohesive team even after the project they were working on was canceled.

Among Traction’s competitors are San Francisco firms such as AKQA and Organic, Kleinberg said.

“The team knows that we really care about them and I would say to a man when the need comes to put in that extra effort and put in a long night, people don’t hesitate to make that happen,” said Kleinberg, who thinks the risk paid off. “That’s been something that has made us a stronger company.”

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