The Web is growing up. Casting off the shackles of spam, black-hat SEO practices, and exploitation of Google loopholes in 1.0; 2.0 marketing practices have matured and become an interconnected system linking customers and marketers in completely new ways. The prolific blogosphere and sites like YouTube, Digg, myspace, Wikipedia and other social media sources have become the major hub of activity on the internet, so naturally the early marketing campaigns that targeted this well of users were cheap reflections of earlier practices. (Posting 25 different ways to describe Viagra on an unused blog site isn’t exactly raising the bar, if you know what I mean.)

So, as the web continued in its participatory trend, marketing practices quickly caught up with social media optimization (SMO). Social media sites were soon adopting many aspects of internet marketing including but not limited to: organic searches, paid searches, banners, newsletters, partnerships, affiliate sites, etc. The list goes on and on.

So after all the shrapnel falls and the dust clears, which scheme works better? Will it be paid ads or grassroots style, get-your-hands-dirty marketing tactics that comes out on top?

The answer lies in a 12 month study conducted by Marketing Experiments meant to challenge the notion that paid ads will produce more traffic and consequently better ROI than blogging and creating solid content. What was discovered was that developing cogent and honest content, posting that content in blogs and other social media outlets and then actually paying attention to the responses and creating a dialogue will garner extremely effective results.

And don’t let the fact that this is an emerging field fool you. SMO practices are fast becoming the standard and waiting on them now will leave your tactics flaccid and banal like a future version of our aforementioned Viagra salesman.

First and foremost, you must know your audience. You must understand what sites they use, what they might want to look at or what they find interesting and then capitalize on it. You’ve got to develop creative content that is both relevant to the site it’s on and applicable to your brand.

The highlighted Social Media Optimization campaigns used witty, clever, inviting and never-underhanded practices to assuage, engage and finally persuade customers with their products and services. This is a key factor in creating an active dialogue between you and your potential customers. It makes you look like a person with a site, not some faceless corporation with an agenda.

Next, you’ve got to make content specifically for broadcast. Whether it’s a video on YouTube or a post on the Fark message boards, you need to softly push your brand. Use subject matter that’s already out there and develop games, videos, blogs or pitches that pique user’s interests. For example, if you’re selling girl’s tees, get a young woman in on the creation of content, whether she’s in the video or behind the keyboard, and let it get pushed around by others.

Remember, the beauty of an SMO campaign is that you seed the content and they distribute it. The only thing is that it must be brand relevant enough to come back to you, but entertaining or informative enough to be distributed throughout a social network. One site used a game where the user was a “paparazzi” shooting celebrities (sadly, it was with a camera.) The better the shot, the more money and the more money, the further along in the game you go. The game was played by more than 2 million users. The campaign was promoting a movie site targeting a younger demographic and, rather ingeniously, used this video game/celebrity culture lampoon to push their brand.

Finally, you’ve got to become an active member of the communities you’re engaging. It will lend you integrity amongst a young and intelligent crowd that can see a transparent attempt at SMO from miles away, yet is open enough to watch or read anything. So post some content of real value to these sites. Put up random funny videos or comment on topics not related to your business and it will do wonders for your credibility and knowledge about your customers.

In the end, the Marketing Experiments study concluded that Social Media Optimization yielded a nearly unbelievable greater ROI than paid ads, 1,427% to be exact. These examples are really just the tip of the iceberg when it comes to the constantly evolving avenues that could be traversed for SMO. All it takes is a lot of patience, a little creativity and the tenacity to weather a few misses along with your hits and you can cheaply and effectively promote your brand and build a customer base by engaging customers, learning their likes and dislikes and marketing yourself and your product accordingly.