“It was probably the worst time in the history of the ad business to start an agency,” said Adam Kleinberg, CEO of Traction, who founded the agency with former colleagues from Tribal DDB, San Francisco.

The agency's original team of four, who met in 1997 while working at interactive agency Think New Ideas in San Francisco, started Traction as an online advertising, branding and digital marketing agency. Since then, it has grown to 30 employees and has rolled out new services including social media and experiential marketing.

The agency's revenue topped $4 million last year, up 30% from 2007. Growth came from such new accounts as California Bank & Trust and Message Systems, as well as expanded business from existing clients Adobe Systems, Bank of America, Egencia and Sun.

For Adobe's education vertical, Traction created an online game in a Facebook application in which users had to guess whether images were modified from their original form using Adobe software. More than 18,000 people joined the Facebook group, and one-quarter of them played the game. Of those who did, 20% clicked on a button to access a tutorial on Adobe software and 6% clicked on a button to find out about a special offer.

“The student market is an emerging audience that is incredibly vital to Adobe's future,” Kleinberg said. “We wanted to create an effective social engagement with these users.”

He noted an emerging online behavior called an “audition,” in which a user will engage with marketing tactics such as offers or free trials.

“The marketing funnel has evolved with the advent of conversational marketing,” Kleinberg said. “Someone will try out a new marketing tactic from RSS feeds to social media to an iPhone app, but it has to have value in order for users to invite you [to market to them].”

The agency did more traditional branding and advertising work as well last year, using new interactive ad formats.

It introduced a rebranding campaign for Egencia, formerly Expedia corporate travel, called “Stretching Travel Dollars in a Slowing Economy.” The digital effort featured banner ads and animated icons of airplanes, cars and hotels that appeared to stretch across the screen.

Traction continues to flourish this year, despite the economy. Last month, it won a $5 million-plus account from Alibaba.com, a global trading site, which will more than double its business.

“It's been a really exciting ride. It's exciting to be winning multimillion-dollar accounts now,” Kleinberg said. M