How to Build a Business on Facebook: Brand Networks, Nanigans, & More

3/5/12Follow @gthuang

Facebook may not have an office in the Boston area, but it certainly has friends here. Take, for instance, the startups that are building their businesses on top of the social-networking giant—and have some thoughts on where the company is headed.

Last week, those startups (among many others) watched the first-ever Facebook Marketing Conference in New York City with great interest. Facebook rolled out a bunch of new features with names like Reach Generator, Timeline for Brand Pages, and Real-Time Insights. These features could have a big impact on the digital advertising and marketing industry, so the event led me to look at some local companies that are affected by the announcements.

First stop: Boston-based Brand Networks. This is a five-year-old social marketing company that has been profitable without taking any outside capital investment. The startup was one of the early Facebook preferred developer consultants—a select group of vendors that help brands promote themselves on the social network. Thanks in large part to its business with Facebook, Brand Networks has doubled in size in the past year and now has about 45 employees. Its big customers include American Express, JetBlue, AT&T, Starbucks, and Warner Bros.

Back in 2006, Brand Networks founder and CEO Jamie Tedford (see photo, left) was a self-described “agency wonk” at advertising firm Arnold Worldwide. “I saw an opportunity to build a company around activating on social networks for brands,” Tedford says. But at the time, that meant building tools for MySpace, Hi5, Bebo, and other social sites as well as Facebook.

Tedford’s company started working with Facebook in 2007, building an application for Puma. That was the beginning of a strategy to focus its marketing efforts on what was becoming the world’s biggest social network. And as its recent IPO filing indicates, Tedford says, Facebook now “is so much more than a social networking site. It’s a social software company. Facebook owns the social graph.”

Of course, that means the tech giant could also own the future of online advertising. And that’s why there is such a frenzy of activity as advertising and marketing companies jockey for preferred position with Facebook while they also vie for the attention of brands. Indeed, Brand Networks faces competition from plenty of other firms such as Stuzo, Vitrue, and Buddy Media.

Tedford’s takeaway from the New York conference is that … Next Page »

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com. Follow @gthuang

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