The high valuation of properties like MySpace and Facebook is said to be justified by the opportunity they represent for companies to take part in the private conversations of connected consumers, and be considered "friends," thus increasing the likelihood of engagement.

That's the theory. Reality is a bit more complex.

As a member of a social network, I have a more personal attachment to it than to, say, a news site. When I update my own feed or check out those of my friends, when I post or look at photos, I am doing something that has some emotional importance for me. My receptiveness, at that point, to a run-of-the-mill ad is practically nil. What's more, the closer the ad stands to what I view as my private space, the more likely I am to feel that "an intruder" is invading my privacy. For while it is normal today to see ads on just about any website – it's the price we pay to view content for "free" – it's different when those ads appear on our "private" social networks. Just consider the hugely negative reactions to Facebook's attempts to monetize their members' data or personal causes…

So what's a marketer to do? Annoy social networkers with conventional ads or anger them by seeking to leverage their data?

There is a third path, but navigating it is a bit tricky. Brands need to come up with ways to bring value to the groups, friends, and communities that make up social networks. How? By giving them things that can be shared and experienced in common. Here's an example. What if Air Canada said to me: "Book a ski vacation with 5 of your Facebook friends and we'll give you a big discount plus a handy tool to help you organize your trip." Now, that would be worth forwarding to my buddies as an idea for a mid-winter break. The success of all those little apps, fan groups, and films that circulate on social networks is directly proportional to their viral appeal. I pass them along either because they strike me as cool, funny, unusual or else because they somehow benefit my group. There's no way I'm going to let my friends judge what I send (and, therefore, me) to be lame, boring or gullible. So brands had better not try to give me something just to gain entry into my group, as if I were some kind of Trojan Horse!

Real friends are priceless – and I risk losing them if they learn that I had "sold them out" for my personal advantage. On the other hand, friends take care of friends – and that's where brands have an opportunity in the social networking space: instead of advertising, why not offer the community mutually advantageous benefits or services?
If the group accepts the offer, the brand wins big. It gains not only friends and "ambassadors," but also credibility within the group. This is trickier than it may sound – brands need to analyze the communities they want to reach and ensure that their offer is relevant and appropriate. Otherwise, the viral effect may play against them.

Marketers looking to profit from the social media trend should focus on creating services that make sense, both for their brand and for the communities they target. Not since the invention of Tupperware parties has there been a greater opportunity for brands to "socialize" with consumers. By the same token, the risk of social exclusion is also very real, if brands don't learn and play by the rules of the game.