How do agencies respond to the 'social media question'?
For a series of thoughts see the post in iMedia most of which are about the relationship between advertising and the medium. In short, the old rules don't apply.
One of the first steps is to listen; but another good place to start is to understand the footprint your customers have in social media. Social Networks provide a good place to start understanding how people use social media. For example the following chart illustrates which networks a particular audience uses compared to a benchmark. While the top two networks are similar (MySpace and Facebook) there is a gap between the two groups for LinkedIn, Plaxo and Classmates. Exploring why people do /do not chose a given network provides insights for marketing.