By their own account, Varitalk has made trend-setting, awarding-winning, clutter busting, kick-ass personalized talking viral audio and video campaigns for nearly ten years.

We recently caught up with Frederick Lowe, Varitalk’s senior executive and sole remaining co-founder, to understand his ideas about the direction of the advertising industry & mobile marketing.

How has advertising’s shifting landscape changed what Varitalk does, in the time since your campaign for New Line Cinema’s “Snakes on A Plane”?

When we did “Snakes,” TV still mattered, mobile was heating up, and social wasn’t a significant consideration for us.  Now social and mobile are the dominant topics of conversation on every pitch.  Literally everything we do, from our technology to our business plan, has been retooled to fit with social and mobile.

Your company was early to the game in mobile.  Did you see Social coming?

In some cases yes, in some cases no.

I worked for a few months with Duc Chau on a separate mobile project in 2002.  When that project fizzled out and Duc went to MySpace as its platform lead, I stayed in touch with him.  Even though MySpace didn’t have much appeal to me, it was clear to me that others would want to use it.  Until Facebook, every other social network I saw looked like a MySpace knockoff to me.

With Twitter, my crystal ball was useless.  Gene Keenan, a longtime colleague and SVP at Isobar, showed it to me in early 2007, before the first big wave of uptake following SXSW that year.  If I recall correctly Twitter had only a handful users at the time.  Gene was as excited by Twitter as I had ever seen him.  I was totally underwhelmed by it.  I have since concluded that Gene’s crystal ball is never, ever, broken.

Where do you stand on Social’s evolution as an ad platform?

The value of metrics like @mentions, #hashtags, and “Like”s is a mystery to every thinking person I know in our industry.  At Varitalk, we see them as distinct but potentially meaningless measures of engagement.  When a consumer interacts with a brand using these metrics, we know we have their attention for the few moments required to click a button or tap out a few bytes – nothing more.

Some people would disagree with you on that point.  What makes you believe you are right?

Tom Wasserman of Mashable has a recent article on the subject.  In it, he quotes David Baser, Facebook’s Product Manager for Pages Insights, who states: “Likes” are an “expression of identity” and “a user saying that I have a relationship with this brand”.  My interpretation of those statements is that Varitalk’s position is precisely aligned with Facebook’s: Despite its loaded meaning, a “Like” is a statement of relationship that doesn’t say anything about the quality of the relationship.  Still, there are some “social experts” who actively promote the idea that a “Like” represents affinity; they encourage advertising tactics to drive up that metric in particular.

Why would anyone “Like” a brand they’re not a fan of?

I’ll give you an example: a colleague of mine recently related that he was having trouble with his broadband service.  He heard their social response was quick, so he visited his provider’s Facebook page where he encountered a “Like” gate: he was required to “Like” the Company’s page before he could interact with the social response feature.  He doesn’t like his broadband provider in the affinity sense of the word, but he wanted support, so he clicked the Like button.

And your objection is?

You have to play the scenario out a bit to see it.

Somewhere out there, an agency or social consultant conceptualized the interaction I just mentioned, and advised a client to buy it.  Somewhere a client agreed.  The agency will create a case study on how successful social integration produces brand lift.  The client press release will tout the increase in “Like”s as proof of improved service.  Because of the assumption of affinity, both statements will be totally disingenuous, but because of the apparent success of the tactic, more advertisers will emulate it.  It’s already happening: “Like” gates have become prevalent overnight.

If the end result is that the brand got what they wanted: more Facebook Likes, where’s the harm?

First, “Like” gates and so-called “Sponsored Trends” are a kind of dishonesty – some would say coercion – that is very frustrating for users.  My colleague, a normally mellow guy, was bothered enough about having to “Like” his broadband provider to mention it days afterwards.  Consider whether an experience like his will make someone more likely or less likely to engage with that brand – or any brand – in a social media setting, and you may come to the conclusion that “Like” gates are a tactic that will diminish consumer interest.

Second, it’s fraud.  “Like” counts make great press, but stakeholders have to hold their noses when they talk about affinity they’ve “earned” using a “Like” gate.  That should tell everyone in the value chain that ad spend is being wasted on executions that don’t deliver value.  Eventually, that revelation may drive brands away from social, not because social is a poor choice, but because unimaginative practices will make it seem like it is.

You obviously don’t like “Like” gates or Sponsored Trends.  But is it really that serious?

It is.  More than a hundred billion dollars of ad spend – budget that was flowing to steadily declining sources of audience – is trying to find a new home.  As those dollars flow away from TV advertising, radio, and newspapers, the logical destination for them should be social – that’s where the audience is.   For now, interactive display and mobile advertising have absorbed some of that spend, but in the long-term the engagement metrics of those forms are too weak to hold it.

I am passionate about it because I see agencies pushing low-value tactics on the greatest reach platforms ever created; I see them threatening the industry itself.  Instead of striving to create actual value, we’re focused on creating the appearance of value.  It’s senseless behavior that will eventually shrink the pie.  We’re supposed to help our clients do better.  We can do better.

So are you optimistic or pessimistic about social advertising?

On the one hand, I think the potential for change is limitless.  The same Mashable article I mentioned says Baser’s group is in the process of introducing new tools – Facebook Gestures – tools that may provide deeper insight for advertisers.  Logically, new metrics will drive changes to existing social advertising technology inline with the interpreted meaning of those metrics.

As far as new platforms, Google+ has finally given us a glimpse of a fresh vision for social – one that will eventually seamlessly integrate all of the Google services we already use.  Similarly, Facebook’s recent graph innovations enable the creation of entire new platforms that empower shared real life experiences, rather than just content and games.

New platforms that integrate shared experiences and advertise products should create value in those spaces.  It’s wide open for companies with the right stuff.  Spotify comes to mind.  It’s amazing.

You said “on the one hand”.  Is there another hand?

Sure.  It goes like this: committing very large amounts of overhead and/or ad spend for long-term projects on social networks, without thorough consideration and acceptance of the risks to your brand’s goals, is the worst idea ever.

That sounds like hyperbole and a half.  How do you justify it?

I justify it by admitting something I’m not always comfortable with: 100% of effective advertising is intrusive.  Great technology and great creative can make ads tolerable — even fun — but no matter what, we only score a win for our clients when we derail a consumer’s train of thought.

In an on-demand world, people only tolerate intrusion under a very specific set of circumstances: (a) they can’t skip the intrusion (b) they can’t get the thing on the other side of the intrusion without tolerating it, and (c) the value of what’s on the other side of the intrusion exceeds the inconvenience of the intrusion.

More concretely: I’ll put up with the 15-second ad in front of Katy Perry’s “Firework” on Vevo, because (a) I can’t make the ads go away, (b) there is no other legal streaming source for the video in 1080p, and (c) there is almost nothing I’d rather watch than Katy Perry singing and dancing while pyrotechnics shoot out of her.  Seriously.

Okay…  How does that line of thinking apply to Social?

Social – and let’s face it, we’re talking about Facebook, Google+, and Twitter here – social is a different animal.  People on social networks aren’t there to interact with your brand.   They may do so voluntarily if the interaction provides value, but as a group, social network users have a very low tolerance for intrusion.  This should be uncontested fact at this point, with MySpace and Zynga as definitive case studies.

Care to summarize why you think those are definitive?

Sure.  MySpace had millions of loyal users with posts, playlists, photo albums, and content – users with too much invested to jump ship.  When it got big enough, MySpace gained a host of new features: takeover ads that covered the entire home page.  Expandable ads you almost always expanded, and then almost always accidentally clicked trying to get them closed.  Huge, pervasive, intrusive ads, served with no regard for users, beyond their value as data used to justify the stunning publishing rates MySpace commanded – until their users left for Facebook.

With Zynga, our feeds were stuffed with Farmville, Mafia Wars, and Zynga Poker notifications.  Gratefully, Facebook disabled notifications in early 2010, ending the spam.  Zynga, developer of these and other successful social games, tried to make the issue about them: about Facebook credits, about Facebook-specific feature integration in their games, and about purported promises by Facebook, broken in the face of Zynga’s contribution to Facebook’s growth.  Lawyers were hired.  Statements were made.

Facebook turned the feature off anyway.  If the gravity of Facebook’s decision is lost on the reader, a little research into Zynga’s revenue should illuminate what Facebook walked away from to preserve its relationship with its users.

These case studies are definitive because they show how quickly intrusive advertising can destroy a social network’s relationships its users, and demonstrative because they show that if your social app upsets enough users of the social network it lives on, you can count on being shut down.  It will happen, and it will not matter how much time or money you’ve invested.

Still, Facebook and Twitter allow a lot of advertising. 

Yes, and one is doing it right and one is doing it wrong.

I think Twitter is doing it wrong.  They’re selling ‘Promoted Tweets’, ‘Promoted Trends’ and ‘Promoted Accounts’.    These are core features of their platform used to denote the relevance of a missive, topic, or entity.  That’s a terrible practice, and it has the potential to eventually undermine the sense of user trust and democracy of their platform.  I get that Twitter needs to monetize, but there have to be better ways of doing that than selling their platform’s credibility.

I realize Facebook has a lot of detractors, but the company has demonstrated extraordinary, consistent responsiveness to users’ sensibilities about ads.  Considering the potential for short-term gain that would come with a less user-centric posture, Facebook’s continued sensitivity may be hard to fathom for some.  But their behavior makes sense when you consider that the network’s early growth was partially fueled by News Corps’ unrelenting exploitation of MySpace as a source of ad revenue.

So what’s the “end game” implication for advertisers?

Successful advertising is intrusive.  Social network users don’t want intrusion.  By extension any “hugely successful” ad campaign on a social network has the potential to generate user complaints that will subject it to scrutiny and mid-flight termination it wouldn’t face in other channels.  If agencies and brands are honest with themselves and each other, and work hard to build apps within established guidelines, it’s probably fine.  Some people hike in active volcanoes.  The risk is pretty low if you observe the rules.  But it’s real.

So would you discourage social media advertising?

No.  But I sense the ready availability of audience on social networks is the dull side of a double-edged sword.  Successful advertising’s inherent incompatibility with the goals of social network operators is the other.

Can you summarize what you mean by a “double-edged sword”?

Every single negative user experience increases the risk of attrition, and like growth, attrition has tipping points.  I don’t know Mark Zuckerberg, but if Facebook’s past behavior with intrusive applications is a reliable predictor of the future, Facebook will never become commercial in a way that drives even a tiny fraction of its users to that tipping point while he is at the helm.

Any closing thoughts?

For now, social has leveled the playing field to an extent: a hard-working, vigilant boutique ad shop can have as much or more competency than a huge agency when the landscape is in constant shift; a Junior Account Exec who thoroughly understands a social network’s zeitgeist can be a more valuable contributor to a social pitch than a Creative Director with 20 or 30 years of experience.

For technology companies, media companies, and agencies serving the ad space, the time is coming to ask whether the best opportunity arises in a future where they merge.  I see an era of generalist agencies – broadly competent small to mid-size, firms that can continuously adapt in the face of constant change, and which vertically integrate almost every service they sell.