The ROI question on SM?

So now we have a number of clients for whom we are doing various different levels of social marketing work.  We’re listening, evaluating, posting content, getting it to migrate, counseling on blogging and tweeting.  YEA!

But there’s a nagging question that they are asking and I’m frankly asking myself. 

How do to truly measure a return on the social marketing investment?

Admitting you don’t know the easy answer to a question on a blog read by your clients is a risk, I know.  But I want to be able to help them understand and adopt.  In the end it always comes down to money, how it is spent and what they get in return.

It is a similar question that is frequently asked of us in our traditional public relations practice.  We are not advertisers.  We can’t guarantee media placements.  We can’t guarantee the media placements we get will say exactly what we want them to say.  But we do know the value of the “third-party endorsement” and how that can drive credibility and traffic, so we develop some goals based on number of placements and even the dreaded number of impressions and the ultra-dreaded “ad-value equivalent” and do our best and keep mostly all of our PR clients pretty happy.

My sense is in social marketing the ROI question is even squishier to answer.  Here’s how I have seen others try to confront it:

1. At the very least it will help you manage your reputation as you can see what is being said about you or your company and engage in the conversation.
2. Your competition is doing it so if you are not then you are just surrendering this valuable new space to them.

3. By creating confusing charts with metrics that most folks can’t understand with cost per acquisition blah, blah, blah, etc.

At the end of the day, I’m left with creating goals similar to a traditional media relations campaign and try to track the number of people coming to and interacting with the various social media platforms AND what you do on an ongoing basis to engage them.  Sprinkle in some of the magic that happens when people start talking about what they saw or read to other people and there I can begin to explain to clients and set some goals.

That being said, if someone put a gun to my head and said I had to explain what kind of ROI they will get if they spent $10,000 on a social marketing campaign, my first instinct likely would be to say, “pull.”

I would love some comments, insights, feedback on the question, “How can you truly measure and set some easy to explain and track benchmarks for social marketing campaigns.  Thanks and HELP!!!