In this completely connected, totally viral, absolutely transparent, geo-targeted, digital world we live and work in… you have to be social. But how do you justify the time and expense it takes to maintain that presence?

Now that social media has passed the point of “why do I need it” to “what do I do with it” the quest to determine the ROI of social media has become more complex.

Since you are asking people to put numeric quantities around human interactions and conversations, which are difficult to quantify, trying to determine the exact return on your investment is not easy and in the long run, may not a good idea. To really understand the impact of social media and social technology on an event, promotion, brand awareness or even product sales, people need to measure the “ROE” … return on engagement.

At Medial Needle, we have been finding valuable “returns” manifesting themselves in ways not always anticipated at the onset as a result of our marketing efforts. More and more, we’ve come to see these unexpected fruits and proverbial rewards only appear because social media was strategically integrated into a marketing agenda.

For example, Media Needle recently executed a food campaign outreach program. While servicing a very small, archaic and insular cooking listserv, we uncovered a hive of influential webmasters; each with robust email lists and social media profiles. So what at first appeared initially to be a seemingly insignificant target community mushroomed into one of the campaigns top case studies. Clearly social media bears the markings of what we once more readily called “viral marketing”. Another campaign had us establish a quality dialog with a key target community. Despite a lull in activity on the client’s end, we maintained the relationship. Six months later, the two partnered successfully for a robust promotion. Anticipating these in conventional ROI terms, especially at the onset of the campaigns would have been impossible.

Thinking about social media in terms of a simple bottom line number puts the whole thing on an old school path of problems and risks, missing great opportunities. Essentially, you have to stop relying solely on the numbers. With social media the trick is to focus on what your numbers end up leading to.  ROI is an effect of quality ROE.

If your goal is to participate in the conversation, to enhance your relationship with your audience and become a trusted member of the community that surrounds your brand; then your ROE has been set into motion. Once you’ve paved this foundation, the more conventional ROI models of sales, registrations, new followers and fans etc. will begin to kick-in, proving the benefits of a well-engaged social media agenda versus a dry and uninspired one.

Finally, ROE like everything else social media related, has a variety of definitions.  Here are two good ones:  We wish to cite Jason Falls’ here http://www.socialmediaexplorer.com/2008/10/28/what-is-the-roi-for-social-media/

Sarah Evans’ different but complimentary tome here: http://prsarahevans.com/2009/05/15-ways-to-measure-return-on-engagement-roe-of-social-media/ as a valuable point of reference.

1.Business Becomes Social

With widespread adoption of social media for marketing, advertising and customer engagement, 2010 will be “the year social media goes corporate.” This means all types of agencies (advertising, digital and PR) will continue to look for ways to help clients participate in social media. But the real trend is the increasing number of Small Business owners who are using social media to attract and retain customers.

2.More Places To Share Video

Video is exploding across all communication platforms and will continue to play an important role in social media. As more and more blogs include links to video content and as mobile devices expand the use of video, we will see even more video content in all aspects of digital, mobile and social media.

3.Mobile Becomes The Viewing Choice For Social Media.

With approximately 70 percent of organizations banning social networks and, sales of smartphones on the rise, more and more people are turning to their mobile phone to connect with social media. As a result, we will see more mobile versions of social media sites.

4.Smartphones Make Websites Smarter

With more consumers using smartphones, websites will start to recognize when a user is viewing content on a phone and be able to deliver more specific, personalized, local content to mobile users.

5.Status Updates Fill Jobs

In 2010 more and more jobs will be posted through social networks. With the increased use of social networks, companies are realizing that announcing a job on an employee’s social networking site is easier and more cost effective than paying $400 for a 30 day job posting and getting 95% bad candidates or paying a recruiter 30-35%.

6.News Feeds Influence Investors

An increasing number of retail and institutional investors are using financial blogs and social networks to communicate and drive investment ideas. Although companies have been slow to adopt, 2010 will be the year that companies understand the opportunity and importance of embracing these channels and engaging with their investors and stakeholders.

7. Customers Speak Up On Fan Pages

Social media is being used to improve customer service. In 2010 more companies will start leveraging social media platforms to gauge the

customer mood, gain insights about specific groups, test products and improve customer relationships. Sites like Facebook will be used to run tailored marketing campaigns to change consumers attitudes, address problems and give customers a chance to share true feeling on a fan page.

8. Social Networks Spend More Time On The Phone

Mobile social networks and communities continue to grow at a staggering rate. Social networking and consumer generated media are no longer limited to a wired computer. Separate reports from M:Metrics and ABI Research show a surge of social media activity via mobile handsets.  According to mobile research firm M:Metrics, mobile social networking is projected to grow to over 800 million users worldwide by 2012.

9. Everyone plays Together

More and more platforms are becoming complimentary of each other (ie. Twitter open API model) increasing integration of social media platforms.

As more companies adopt some type of integration with major social platforms, niche social platforms will need to work on mobile, Facebook and Twitter to gain major traction. In particular, the market is just begging for an app where a user can manage all social platforms in one place, for both aggregating and disseminating content.

10. Social Networks Work For The Government

Many government agencies are already using Twitter and Facebook for crisis communications. However more and more federal, state and local government agencies will start using to social media. G-Commerce will evolve. New applications will be developed to directly deliver services and benefits to citizens via smartphones.