Do your friends trust you? How about your virtual friends? Social media marketers not only want to know who you’re talking to about the latest episode of “Lost,” they want to know how you’re interacting with your friends on your social media sites. If you’re the type of person who consistently uploads, shares, rates, blogs, and, yes, whom your friends trust, you represent a valuable component for the social media advertiser.

According to Forrester Research, 75 percent of Internet users use social media, but less than half actively participate and influence their communities. Monetizing social media has been a challenge, but Lotame, a New York-business intelligence network and iWidgets of San Francisco, have made inroads into this maze by targeting users when they’re in the right mindset.

Advertisers used to think that social networks only appealed to college-age students, but now social media has a reach comparable to the portals, such as Yahoo and MSN, says James Kiernan, vice president of digital media and innovation at New York-based MediaVest Worldwide. "There was a tendency not to acknowledge the [social media] ads as much as traditional ads, but now Facebook and Lotame are making the ads more relevant. All advertisers should consider social media as part of their plans.”

Lotame tries crowd control

Lotame gathers research data for its advertising and publishing clients (Flixster, Photolog, and Bebo) through its Crowd Control platform. The platform builds anonymous profiles of users by their age, gender, zip code, along with their actions and interests on the social media site. In fact, Crowd Control detects whether a user’s mouse is idle or not by recording the time spent looking at the creative content on the screen.

“We look at people, not pages and how they are acting, interacting and communicating on the sites," says Andy Monfried, CEO of Lotame. "We are focused on giving results to our advertisers so they can formulate a plan.” For instance, Lotame could target women ages 21-35 who upload and share content on Flixster, a movie social networking site, and then sell that data to an advertiser who would place their ad on Flixster. For movies, word of mouth is very powerful and Flixster is able to drive interactions with people who are vocal and want to share their opinions. It is within these targeted interactions that advertisers can make the most impact.

“Social media is huge, but it’s important to not look at it as an amorphous thing," says Steve Polsky, president and chief operating officer of Flixster. "You need to get people in the right mindset and catch them when they’re interested in movies -- that’s what we try to offer.”

Lotame partners with consumer goods advertisers and knows to catch users after they’ve checked their inbox and are more passive and receptive to advertising. Says Monfried, “Historically, ads didn’t respect the user and included pop ups and pop unders. We’re driving incredible business for our advertisers and publishers since we’re looking at it differently from everyone else by creating the technology and the means to do so.”

iWidget uses widgets to monetize content

“It’s really really hard to come to a website nowadays because users are using social media and are waiting for their friends to post a link," says Peter Yared, founder and CEO of iWidgets. "Instead of pushing a rock up a hill, you put it where the people are.”  iWidgets gets web publishers’ content on social networking sites and also uses video players to integrate targeted offers. In these video players, pre roll clips introduce offers and encourage fans to share these offers with their online friends.

“Online advertising used to be very much like a billboard," Yared says. "Now it’s much more engaging -- your product has a core set of fans and they want to show off your products.”

Successful social media advertisers know how to get users to recommend and talk up their product without ever talking down to their market. And they know about finding the right community of friends to spend their advertising dollars.

Concerns about privacy

With all of this raw data from social media users, it would be quite easy to invade the privacy of consumers. In fact, many Facebook users don’t like how the ads on their profile page advertise weight loss, colon cleanses, and diet remedies because they feel Facebook is lifting data from their profile to specifically target them. This is in a way true. In order for social media advertising to grow and gain the consumer’s trust, it has to protect identifiable information and keep the data anonymous. In fact, respect and trust are what keep the social media community intact since users rely on strangers’ recommendations. “Yes, you can deliver targeted advertising," says Kiernan, "but acknowledge the fact there are controls to preserve consumer privacy.”