Companies across Canada are jumping on the social-networking bandwagon as they attempt to appeal to tech-savvy clients and find new ways to promote their products and services.

A boom in cellphone usage, the downturn in the newspaper industry and increasing use of personal video recorders that can bypass TV commercials are all factors driving advertisers to seek news ways to market their products, industry players say.

As a result, social-networking service and website providers say the boom that they are enjoying will not go bust anytime soon, despite the poor economy.

"Social media is exploding right now," says Chris Breikss, president of Vancouver-based 6S Marketing. "There are more and more companies getting on board every day. It's really a segment of advertising for companies, but the growth is unprecedented."

Amit Kaminer

Social networking and social media are interchangeable terms that refer to the use of such online services as Facebook, Twitter, LinkedIn, Flickr, Yelp and Digg.

In a survey of 10,000 Canadians, 6S Marketing found 70 percent of Canadians use social media, while 61 percent of firms now track what people are saying about them online.

Founded in 2000, 6S Marketing sets up and maintains Facebook business pages and other social-networking accounts. The 22-employee online marketing firm focuses on driving traffic to websites for 130 clients across Canada, mostly based in Vancouver.

Breikss says his firm has evolved and expanded out of necessity in the marketplace.

"We've been providing (social networking) for about two years, but in January of this year we hired a director of social media, and we are now providing it on a larger scale," says Breikss. "Before, we had one or two clients that needed that service. Now, we have more like a dozen."

Dan Latendre, president and CEO of Kitchener-based Igloo Software, which helps organizations build secure online communities and provides tools that enable customers to use blogs, Wikis and other applications to build networks, says social networks are paying off for companies internally and externally.

"Inside the firewall, it's really about improving productivity by building connections between employees," especially workers on the road or stationed in separate offices, says Latendre. "Outside the firewall, in the marketplace, it's using social-networking tools to make tighter, more loyal, trusted connections between your customers, partners and suppliers ..."

Igloo, which serves 550 companies and other government and non-government organizations across North America, has launched a BlackBerry application that allows people to use their cellphones for blogging, multimedia sharing and messaging without having to connect to a Web browser.

The growth of in-home software applications is also driving the growth of social networks.

According to the 6S Marketing survey, Facebook is the most popular social-networking site with 70 percent of people surveyed having an account, while 47 percent of Canadians - mostly 19-25 years of age - use Twitter. Just 20 percent use MySpace.

YouTube and Flickr are the most popular social-media sites with 38 percent and 29 percent usage, respectively. A majority of Canadians (58 percent) blog, mostly for work.

Companies are still trying to figure out ways to make money from social networking, says Amit Kaminer, a telecommunications analyst with the Toronto-based Seaboard Group.

"They know that the value is there," he says. "They know that they have a captive audience and they know that they have valuable subscribers and followers and friends. But they're still lacking on: How do we actually monetize that?" Kaminer adds social networks are here to stay, and companies need to participate in them if they want to stay competitive.

"Resisting the change will be futile," he says.

Roger Kondrat, co-owner of Calgary-based social networking firm Mighty Mouth Media, which has been developing the use of social networks since 2001, says companies should focus on the demographics of their audience rather than the medium that's perceived to be most popular.

"Forget about what the platform is, forget about what the coolest name is and think about what your business objectives are," says Kondrat. "A lot of companies are hopping on and they're saying: 'Why aren't we getting results?' I say:, 'Well, what kind of results do you want?' Then they look at me with the glassy eyes. They didn't think in traditional business terms."

Julie Szabo, a partner in Vancouver-based online public-relations firm Capulet Communications, which specializes in social networking, agrees companies have to find a balance between social networks and traditional marketing methods and strategies.

Szabo, co-author of the forthcoming book Friends with Benefits: Online Marketing with Blogs, Facebook, YouTube and More, says social networks are a good fit for software companies that can sell their products directly online.

But she adds firms should avoid trying to adopt all forms of social networks right away.

"I really do believe in the power of social networking, but I don't want to oversell it because for marketers, it's hard work."

Dave Stevens, general manager for Toronto-based MySpace Canada, which averages 5.1 million unique visitors per month and has 5.5 million registered users, says his company has become profitable by serving as a lifestyle or entertainment portal.

He says social network operators have to focus on building online communities.

"We've seen a lot of progress," says Stevens, whose firm derives all of its revenue from advertising. "In the beginning, advertisers in Canada were a little shy about social media. We've really seen them coming around. We're able to integrate the advertisers into our product.

"Instead of just display advertising, we're merging our advertisers into the user experience. They may be with a branded content community where the users can interact with content supplied by the advertiser, or it may be with our tools, where they sponsor a friend categorization or a blogging tool or a photo tool."

MySpace is strategizing ways that it can encourage small businesses to bring together people who are interested in their products or services and have a one-to-one talk with them.

"Create a community around your product," he says. "Create a community around your business ... Social networking is all about bringing people together and talking about a common interest."

(Monte Stewart can be reached at monte@businessedge.ca)