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Despite the multi-billion dollar market valuations, questions about the commercial value of social media, especially as a business to business marketing channel, continue to be raised – how do you make money out of social media? When the man who runs the world’s largest advertising agency joins the debate, it’s hard to ignore his comments. Sir Martin Sorrell, The chief executive of advertising giant WPP speaking at the Royal Television Society’s Cambridge Convention, questioned if Facebook, Twitter and other social networks can make profits from advertising because, whilst they may have billions of users, will those users accept promotional activity?

“I’m not sceptical about social media,” said Sorrell, “I’m concerned about when you monetise it because by its nature it’s me talking to you electronically, digitally. If I’m talking to you and I send you a commercial message how do you feel about that? If I say ‘buy this’ or ‘do that’, it’s not the right context for sending commercial messages.” However, he also said that social networks were an “extremely powerful way of building brands, building trust and building reputation” because people recommend products to each other.

Consumer advertising is increasingly directing us to Facebook pages or Twitter feeds rather than a business’s URL, but even that somehow feels slightly uncomfortable. I might want to engage with a brand for any number of reasons, but do I really want to befriend it? I certainly wouldn’t want to ram it down the throats of my friends or contacts directly even if I might rave about an especially good, or bad, experience. It’s a bit like being invited to a house party only to find out it’s a pretext to sell you tupperware or candles.

“We used to write letters to each other and now we correspond through Facebook and Twitter and other forms of communication.” Comments Sorrell “If you interrupt that with a message you may run into trouble. Mark Zuckerberg tried two failed experiments — Beacon and one other — which were withdrawn in 24 hours after a revolution on Facebook.” He continued, amid reports that Facebook has been forced to delay its flotation by at least a year because it had missed its revenue target by $400 million.“I have some fundamental doubts about the ability to monetise social platforms,” he said.

Even some of the commercially driven social media enterprises are facing serious questions. Groupon, which promotes local business by offering discount coupons to signed-up subscribers based on location, was last year’s fastest growing company ever according to Forbes magazine and is expected to float for £19 Billion. However, they’re experiencing a backlash from their business subscribers who have lost money through the scheme having been coerced into offering unsustainable discounts. The discounts have been taken up by ‘professional bargain hunters’ who just follow the deals around rather than becoming customers. Groupon’s new business sign ups are dwindling and many disgruntled partners have left the scheme prompting some analysts to question whether Groupon is just a flash in the pan; “Running a Groupon deal can be a terrible financial decision for merchants. Groupon’s financials also raise questions about its ongoing viability.”

Founded in 2003, but now with over 100 million registered users, Linked has become the biggest business-based online network. LinkedIn is predominantly free and is a business networking platform that was sometimes overlooked in its early days as it was perceived just as a way to showcase your career or CV online, so became the domain for job hunters and recruitment agencies.

Facebook and Twitter have really raised the bar in terms of the level of functionality social media users have come to expect on line. Whilst Linkedin is perhaps still a bit ‘dry’ in comparison, it has invested heavily in usability to ensure users can search for people, connect and engage with them, ask questions, target them with specific content as well as access their networks.

With engagement being the key to social media success, the group discussion function is an effective way to encourage relationships online. LinkedIn can be very powerful because of the reach it offers and by connecting users – how else could you be introduced to so many targeted business professionals so quickly?  Discovering information about prospects and customers will also help make the conversation on and offline much easier.

Businesses can also link it to their Twitter and blogs so that LinkedIn sends out updates to the various groups, streamlining and simplifying the social media process and driving traffic to your site. And Linkedin can only get stronger in future as the membership base continues to snowball. As the economy becomes more splintered and specialist, it’s an ideal central hub for sourcing and sharing skills, building relationships and referrals.

Many b2b organisations are aware of the benefits of blogging but are still unsure as to how to actually carry it out as part of a business strategy.  Blogging is often perceived as overly time consuming and in turn put to the back of the pile. The following attempts to provide some guidance in terms of what to consider when developing an internal blogging strategy;

Define the objectives

As with any marketing activity it is important to keep focused on the overall objectives, this will help determine the most appropriate content and help develop topics. These objectives may be SEO driven to support an SEO strategy, be based on industry news/thoughts and or to support sales and customer service. It is also vital that the objectives take in to consideration the target audience as the content of a blog and it’s appropriateness to the target audience is critical to its success.

Establish the ‘bloggers’

It is important that the most appropriate individuals within a business are writing the blogs and often a multi author approach can work well in terms of generating new content and ideas. However a level of control is critical in order to ensure the content is checked and appropriate for publishing. Certain disciplines should be set in terms of maintenance, scheduling and content moderation, with appointed individuals responsible for this.

Create a schedule

Creating and defining a schedule will help organise blogging efforts and there are online tools available to help with this, for example the Word Press editorial calendar. Keeping a steady flow of ideas is important but can be challenging, therefore creating a library of topics/blogs and making an investment in time early on in the process can help in the long term. Defining a number of key resources to pull from and keeping on top of industry news can be effective.

Measure the response

Don’t expect too much too soon. You should set small and attainable goals to start with, these may be comments, enquiries, re-tweets etc, and then gradually increase the goals overtime as the momentum increases.

Blogging can seem like a lot of work to start with but by establishing internal processes and disciplines, executing a blog strategy becomes a much simpler task.

With more and more clients realising the impact social media can have on their business yet still slightly cautious about how they should use it, I was particularly interested in attending the latest Insider media Social Media conference. This half-day conference aimed to explore some of the myths behind social media and explain the business benefits of having a well executed social media marketing strategy.

The event was well located and well organised with an assortment of speakers from various sectors, all with a different target audience. The line up of speakers was strong and was very ‘case study’ orientated which is always a more interesting and effective way of illustrating a varied topic.

The Greater Manchester Police discussed their idea to tweet every call the force received over a 24-hour period, an extremely interesting case study and one that really highlighted how the boundaries within all industry sectors are being pushed due to social media.

Other speakers included the Managing Director of Netcars.com, a new online business who are exploring and experimenting with social media and have clearly identified a link between social media and search engine optimisation.

System One Travel cards explained the importance of ‘engagement’ and the value it has for their business, illustrating how they have seen real value in networking with the local community via Twitter. Likewise No Fear Extreme Energy Drinks described how they use social media to raise awareness of a new product, using online games and other viral campaigns.

Other examples came from Forever Manchester, a charity organisation using social media to target a younger audience and Juice Digital, a social media marketing agency who provided a real insight in to the benefits of planning and measuring any social media activity. Not to mention a humorous spin on the more serious topic of the legal implications of social media for businesses by social media lawyer Steve Kuncewicz.

Overall the key messages were consistent throughout the event, like any other business initiative social media should have a strategy, clear objectives, KPIs and measurable ROI, but  when talking about ROI the value of ‘engagement’ must also be taken in to consideration.

People are increasingly using social media as a way to research before purchasing a product or service therefore becoming part of the verification process, so it can’t be ignored. It can be very powerful tool. How else could you reach such a large audience, so quickly and with such a low cost?

Time still appears to be an issue for many businesses and this was reflected in the Q&A session at the end of the conference. To sum things up, for me, despite the very comprehensive case study examples and the hints and tips provided, I would like to have seen more b2b examples, examples of businesses that don’t have a young target audience, corporate businesses, small b2b organisations using social media marketing as part of their strategy.

With many businesses still unsure about what to tweet about and the value of tweeting we’ve put together a list of best practices and tips;

- Put in place structure and boundaries for those tweeting within the business

- Be transparent and informative

- Find something that only your company can provide customers and then give it away – it will help get in to a conversation

- Actually do something with the information you find

- Make sure you add a human element, being human and “chatty” will give your tweets more value

- Make your resources easy to find and interact with

- Observe the tweets of those who follow you on Twitter

- Tweet to alert your followers about things you’ve discovered from other users

- Share valuable tips and tricks with your followers and provide information about upcoming events and promotions

- Respond to feedback, questions, and ideas in real-time

The key is to communicate something that creates value for your followers; therefore good tweets are not necessarily about the subject, but more the way in which they engage with the audience.

For the first time ever, social networking website Facebook has overtaken Google’s as the most popular website among US internet users, with industry data showing it has scored more visits on its home page than the search engine. It’s further evidence that the web is becoming more sociable than searchable.

The lead has become almost inevitable as Facebook’s popularity has grown rapidly from just over 2 per cent of visits a year ago and as Facebook’s membership has more than doubled in the past year, passing the 200m mark last April and 400m in February. US users spent nearly six-and-a-half hours on Facebook compared with fewer than two-and-a-half hours on Google. Furthermore, internet users worldwide spent more than five-and-a-half hours a month on social networking sites such as Facebook and Twitter in December 2009, an 82 per cent increase over the previous year, according to the Nielsen Company research firm.

“The true value of Facebook and social networks is just becoming clear to marketers,” said Augie Ray, analyst at Forrester Research.

Related article on ft.com