MySpace…Friendster…Facebook…Classmates…Youtube…LinkedIn…MyFamily…no matter where you look, Social Networking is becoming a headliner for Web 2.0. Even if you don’t use these sites yourself, you surely know many people that do. Case in point, of the seven I mention above, I use four today. In short, social networking is pervasive.

And while these online community sites are perhaps the most recognized form of Social Networking, they are by no means the only form of social networking. User-generated product ratings are emerging as a powerful influencer in the purchase funnel – so powerful that innovative companies like BizaarVoice are consolidating and syndicating this content. Blogs are another great social networking example, allowing one person to reach – and influence – thousands if not millions of individuals. That is extraordinary power. And there are many other examples of social networking on the Web, with new ones sprouting up every day.

Any way you slice it social networking is white hot – leveraging the very fabric of an increasingly digital society to thrive and grow exponentially. And with its intoxicating mix of extreme customer stickiness, deep loyalty, and undeniable purchase influence, marketers are being drawn to social networking like moths to a flame. They are investing millions, in most cases without measurable results or a clear idea of success.

With this mind, I want to share some thoughts and best practices in social networking optimization that I hope will help you hit the ground running and avoid getting too close that flame.

When I think about social networking measurement, I do not see just one opportunity – rather I see three. Each of these differ in focus, breadth, and strategy – forming what are really three different schools of optimization. They are:

1) Advertising
2) Experience
3) Customer

Advertising is focused on measuring both the direct and indirect success of advertising campaigns that are run on social networking sites such as MySpace or Classmates.

Experience takes a much different view and examines the influence a particular feature, tool, or asset can have on the overall success.

Customer looks at how particular individuals influence overall business success and the social network function itself.

In this blog posting, I’ll focus on the Advertising piece. In parts two and three, I’ll cover Experience optimization and Customer optimization, respectively.

At a basic level, measuring the effectiveness of social networking advertising isn’t much different from measuring other forms of online advertising. For example, let’s say you run a banner ad on MySpace that highlights a new movie you are releasing to market. You want to understand how many people click on this banner, visit your site, and ultimately convert to buy the movie. To do this, you tag the ad, record it in Omniture SiteCatalyst – perhaps add some meta data such as the ad type, site name, landing page, etc – and you’re good to go. Focus on the ads that work, cut or refine the ones that don’t and generally speaking, you’re set.

But in my mind, social networking is much more interesting than that. When you run a promotion on a social networking site, you are not only attempting to start a dialogue with your direct target audience. You are also attempting to start a dialogue with all of their friends, family, and colleagues. In other words, the members of your network and theirs as well. If something appeals to your initial target, they will very likely forward it/refer it/endorse it within their network. This appeal may be direct, such as “Yes, I’m interested in that movie” or indirect, such as “That movie isn’t for me, but my brother would love it” – but in either case, it pays dividends. The power of referrals is astonishing – especially bad ones.

But you still may be scratching your head. Referrals and endorsements aren’t new to marketing. “I’ve forwarded plenty of promotions to my friends” you might be saying. True, the concept isn’t new. But what is new is the distribution channel…the pipeline so to speak. With social networking, we’ve taken a great leap forward in our ability to easily and direct correspond with those people we often have the most influence over. As a marketer tapping into this oasis of credibility, you don’t get much closer to printing money than that.

So when approaching social networking advertising, it’s critical that you keep this in mind. Remember, don’t just impress your date – impress their parents too. I believe when advertising on social networking sites, the “secondary audience” is just as important – if not more important – than your primary audience. I know some folks will disagree, but that’s my opinion and I welcome your feedback.

To add fuel to the fire, I also believe this phenomenon is more pronounced today than ever. Why? Because most social networking sites are still struggling to effectively target their audience. There are many reasons for this, but looking back on my own experience with one of the Internet’s largest community sites (eGroups had over 20 million members and accounted for 5% of the world’s email volume), it’s really an issue of scalability, ad serving, and segmentation.

Simply put, it’s really hard to serve highly targeted ads to millions of users in real-time without degrading the customer experience. In fact, up until Touch Clarity came into the market, it was nearly impossible. Not only are the technology limitations; but from an ad serving perspective, we often don’t have an efficient marketplace to expose such inventory to prospect advertisers. And because of this, if you’re advertising on social networking sites, chances are you have more of a “spray and pray” approach than true “1:1” customer dialogues that most marketing books will chastise you for not achieving. Let’s face it – the market just hasn’t been there– it hasn’t been there for years – and as a result, the power of the “secondary audience” has become that much more meaningful if you want to maximize your success with social networking advertising.

So how do you optimize this social networking advertising then? Great question. There are many different ways, depending on your campaign type, call to action, and target audience. I can’t summarize them all here. But to get you started, here are a few tactics:

1) Use discount or coupon codes – this is one of the most tried and true methods of multi-channel marketing measurement, and social networking campaigns are no exception.

2) Use micro-sites and redirects to identify new prospects – Micro-sites and redirects, how ever brief, offer a great opportunity to identify new prospects and begin your dialogue with them. There are many innovative examples of this marketing tactic, and even the briefest of exchanges can expose significant remarketing opportunities.

3) Leverage integrated analytics and behavorial targeting – Advanced integrations like Omniture SiteCatalyst and Touch Clarity offer unparalleled opportunities to deliver highly effective marketing campaigns. Look for Social Networking sites that are deploying this type of integrated solution.

So to recap, social networking is highly dynamic and Marketing 2.0 is rapidly evolving to take advantage of the emerging medium. As a marketer, you have the opportunity to reach millions with a sense of credibility that has seldom presented itself in the history of marketing. But as a marketer, you also have an obligation to measure and optimize this new medium like never before. The potential is there, the tools are available; the question is how effectively can you take advantage of this opportunity? That is your competitive advantage and will define the winners and losers in this arena. Of course, if you have any questions about social networking optimization, we’d be happy to help – just reach out to your Omniture account representative or contact us directly at Omniture Best Practices.