You never heard of it? Well, lets put it plainly - FourSquare fits in it! It basically is the use of a game to engage consumers and keep them interested in your product, making them follow the steps you want. It does so by a "play our game and get your reward" (even if the reward has no monetary value, like a video game level) system, that effectively drives consumer interested. I am more used to see this being used as a complement to social marketing (see FourSquare interlinking with Twitter and Facebook), but it might also be looked as a stand alone - though I would say the really value of it is as a part of a bigger campaign.
So, if you really want to impress your agency, just ask them how could their creative idea be gamified. But if you want to impress and impact your costumers, think of gamification as part of your initial brief. This is just my hint...
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