IF THE marketing world were going to give the Oscar for Best Picture, it would have gone to The Social Network, the film that chronicles the rise of Facebook, the media phenomenon of the past five years.
But for advertising people, in particular, watching the film has been bittersweet because of Facebook founder Mark Zuckerberg's contempt for the ad industry -- at least as it is portrayed on screen.
The Zuckerberg character believes he can build Facebook without the help of the ad agencies and those Madison Avenue suits in New York wouldn't get social media anyway. When he reluctantly does see the agencies -- at the behest of his soon-to-be ex-business partner - - he is so rude and dismissive that the meeting is a farce.
Reality has turned out a little differently as Facebook is now happy to take advertising money, bringing in an estimated $1.5 billion (Pounds 925 million) in revenue last year. But advertisers and marketers have been playing catch-up ever since. As we have seen in the Middle East in recent weeks, the advent of social media is a genuine revolution in communications -- in which brands or governments risk being excluded from the online conversation between citizens.
Now ad and media agencies, digital specialists, marketers and public-relations firms are all competing to show clients they know how to navigate this unruly new terrain.
Social media isn't just about Facebook, of course. But when it comes to monetising advertising, it is "the only game in town" for the next 12 months, according to Simon Spaull, chief development officer at TBG Digital, a digital agency based in Highgate.
Other sites just can't compare with Facebook's 600 million users. "The world's third-biggest country," as WPP's Sir Martin Sorrell says. In contrast, Twitter, which finally started hiring in London last week, is said to have generated a mere $45 million last year.
TBG Digital, founded in 2001 and employing around 100 people worldwide, is so convinced of Facebook's importance, it has repositioned itself as a Facebook specialist.
All the marketing giants are creating social media units and buying expertise.
WPP's $5 million stake in Buddy Media, a US advertising firm specialising in Facebook, is just one example. Facebook's vast database of personal details, covering age, sex, location, friends, likes and dislikes, already offers huge opportunities for targeted ads.
But the key for brands is that social media is not just about paid media -- buying advertising space and direct response. Crucially, it is also about what marketing people refer to as owned media (what a brand can do for itself by managing an official Facebook page, Twitter feed, customer website, creating free content such as games, and so on) and earned media (monitoring what consumers, celebrities and journalists are saying about the brand and trying to influence conversations and how they share content).
Owned and earned media present a new challenge for brands because they require careful positioning and tone yet also a fast response - - particularly when things go wrong. Interestingly, Twitter appears to be playing a more important role than Facebook for some brands. Research by PR firm Burson-Marsteller suggests 83% of European businesses in the Fortune Global 100 are now using Twitter and 57% Facebook.
The buzz phrase is "community management". …