Brian! Good to hear from you. Thanks for your feedback.

I agree that companies definitely need to use social media to show the world who they are and why their goods and services are worthwhile; the audience is too big to ignore. But to even hope to capitalize off of these social media sites, companies will need to divert valuable resources from more worthwhile channels.

Even with a passionate and dedicated team and a well organized strategy there’s no way to know if you are just distracting yourself from more traditional sure-fire revenue streams.

Here is a great report from Susan Etlinger, an industry analyst for the Altimeter Group, that illustrates the difficulty of determining ROI on social media and what kind of resources one needs in place to begin using social media to effectively increase revenue:

http://susanetlinger.wordpress.com/2011/08/10/research-report-a-framework-for-social-analytics/

All the best!

@Craig – Social media stats are meaningless in the long run. May I direct you to Myspace. Things change so rapidly in this sphere, that “projections” in e-commerce, or social media, must always be taken with a grain of salt. Look at the recent change of accounting of Groupon for example. As a business owner who has run a Groupon, I have mixed feelings about what it can do for a business. I also know many other business owners who have done business with them as well as other daily deal sites, it’s not all one big gravy train for everybody. So that point, I must say, is not the end all be all.

I believe you did hit it on the head however with the the rise of international social media/e-commerce. That is where the next revolution will occur IMO. One that has been overlooked relatively thus far on a grand scale as far as new streams of revenue are concerned.

And yes, I agree that any digital seller can benefit from social marketing, if done right however. Shady promotions and black hat marketing however are beginning to run rampant. The new trend is doing anything you can to up your “likes” on FB or followers on Twitter. This black hat tactic is done as easily as posting a job offering on Craigslist, and saying that you are going to be expanding into this market, but for any potential candidates, for them to have to go to your FB page and “like” your company, and then to submit a resume. These postings are not actually hiring in those “new markets,” nor do they have any interest in hiring anybody, they just throw that out there to up there social media status.

Lots of room for black hat in this interwebs world. And people fall for it, time and time again. I guess my point is, is that there is still lots of black hat shady stuff going on with social media. Not everything you see is what is really the truth.

@Elan

While ROI on social media efforts may not be exactly clear , it is a mandatory channel that any company which wants to stay relevant must adhere to. Company’s and exec’s must think of it more of a telephone line, you can’t exactly calculate ROI on having a phone line, but you need to have it. It’s a necessary channel. If you want ROI on it, that’s up to you as the decision maker as far as what you want to do with it. You don’t have to run promotions or discounts, you can just engage your base and keep a presence. But again, if you did want to run a special, do your homework, don’t get burned. Regardless though, it is a must to have those channels available. Sink or swim. Times change, this is the new face of commerce. Either get ahead or get left behind. How you choose to use it, that is the golden question. That is the bottom line.

As far as revenue coming directly from FB or other sites, with the 7% stat and what not, I don’t buy that. Brand building is hard to trace. Although I may not DIRECTLY purchase from FB, who’s to say that the presence on FB didn’t contribute to the end conversion? It’s hard to quantify. And to early in the game, with questionable surveys and stats to quantify any of that.

So no, I don’t buy any of those stats directly. I don’t. Having a presence via social media is critical to surviving in today’s marketplace. How you want to use that though, is going to be the make or break.

You can brand build, you can run a promo, or you can engage your base, or do all of that plus more, but regardless, a well though out strategy, with opt in marketing, intent on not alienating your base with in your face marketing, which will generate revenue one way or another upstream, is the key to success in the social media sphere.