Pardon me while I light my digital Marlboro…

Online product placement is the future of digital marketing, an ad agency chief-turned-venture capitalist has told a digital marketing conference.

Mark Kvamme from Sequoia Partners, speaking at last week’s AAAA Digital Conference (now there’s an event guaranteed to get the first listing in the Yellow Pages!) and reported by Online Media Daily, said that if he were starting his former ad agency CKS Group today, he would “bypass the traditional interruption model of advertising and focus on ‘owning the conversation’ among consumers using digital tools to shape their own media interactions.”

Kvamme’s said that “The key thing here is how do we invite, ask, entertain and co-create? If the consumer doesn’t like what we’re giving them, they’ll click off immediately.”

However, he then predicted that the future lay in “creating new ad units that blur the conventional boundaries between content and advertising.” He gave examples from companies Sequoia has invested in, including the comedy video site Funny or Die, which lets visitors create their own movie trailer spoofs incorporating footage from new releases, and StarDoll, which he claims 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.

Surely “blurring the line between content and advertising” is not the way to capture today’s cynical Y-gen digital consumer? That doesn’t sound like “owning the conversation” to me – that sounds like intruding upon a conversation, just like the banner ad models Kvamme is criticising. Besides, in today’s disintermediated environment, trying to own the conversation is not realistic. As The Cluetrain Manifesto says, markets are conversations, and companies need to try and participate with the conversations that are already going on, not “own” them.

It would be interesting to hear of any Australian examples of what Kvamme is talking about, and evidence of whether this works or not. I’m happy to be proved wrong if is approach really works.