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.

Every seven seconds someone in America turns 50

77 million people were born between 1946 and 1964. By 2015, the AARP predicts that       people aged 50 and older will represent 45% of the U.S. population.

These consumers matter and advertisers should pay attention.

The largest age group in the United States

According to the U.S. Census, in 2010, 49 will be the single largest age group in the United States. In 2010, adults 45 and older are predicted to out-spend younger adults by $1 trillion.

Where do casinos, health-care organizations and political campaigns — examples of advertisers whose models depend a lot on the 55-plus demographic — advertise if most broadcast outlets are programming toward younger demographics?

The answer is social networks

Internet monitoring site comScore, estimates 16.5 million adults age 55 and older currently engage in social networking.

Baby boomers, are finding social networking sites appealing for the same reasons younger people do – to stay connected. Of course the older you are, the more likely you are to be interested in reconnecting with long lost friends and classmates you haven’t talked to in more than 30 years.

Boomers like to Blog

Most people believe that all of the blogging, Twittering and Facebooking is being done by twenty and thirty-somethings.  However the facts tell a different story.

The fastest growing users of social networking sites

According to a Consumer Electronics Usage Survey from Accenture, Baby Boomers (those born 1946-1964) are the fastest growing users of social networking sites and are increasingly reading blogs.  Meanwhile Gen Y interest in these services has started to plateau.

Baby boomers are social

• Increased reading blogs and listening to podcasts by 67 percent year over year; nearly 80 times faster than Gen Y (1 percent)
• Posted a 59 percent increase in using social networking sites—more than 30 times faster than Gen Y (2 percent)
• Increased watching/posting videos on the Internet by 35 percent—while Gen Y usage decreased slightly (-2 percent)
• Accelerated playing video games on the go via mobile devices by 52 percent— 20 times faster than Gen Y (2 percent)
• Increased listening to music on an iPod or other portable music player by 49 percent—more than four times faster than Gen Y (12 percent)

Gen Y is falling behind

• Participation slipped in virtual worlds from 23 percent to 19 percent
• Consumed no more video online than they did last year
• Blogged and contributed to wikis less ( down from 35 to 33 percent)

Grandma loves Facebook

According to Facebook, their fastest growing demographic is those 35 years old and older. According to iStrategyLabs, Facebook has a user base of 18.1 million users, and the number of users age 55 and over has grown from a negligible 950,000 to 5.9 million in a mere six months, which equates to a 513.7% increase.

Look who’s on MySpace

Even MySpace, with 130 million users, is enjoying a surge among the 55-plus set, who total 6.9 million users and spend an average 204 minutes a month on the site.

The AARP gets social

In just one year, over 350,000 users created 1,700 groups celebrating everything from gardening to social activism on the AARP.org social networking platform. This 55-plus online Community encourages users to meet new adult friends and socialize with one another by sharing photos and videos, playing online games, asking advice, writing in a journal, and chatting with their connections. As social networking evolves, older consumers are becoming more and more involved with social networking sites. According to a study conducted by the AARP, 58% of members over 50 access their online community several times a day.

Boomers like to share

These sites are where Boomers share their opinions, and brands are starting to realize social networking is a great way to connect with this increasingly large group and wealthy group of consumers. In a world where few people live close to family or old friends, social media sites are making it easier for everyone to reconnect.

Everybody’s doing it

Whether it’s congressmen Twittering during presidential speeches, parents connecting with high school flames on Facebook or empty-nesters planning group outings on grown-up sites such as Eons.com, Baby Boomers are a growing part of social media’s evolution, becoming more connected and more engaged than ever before.

Everyone is Sharing Location Based Information

This year, Twitter, Foursquare, Loopt,  Gowalla, Google and Facebook will all make it easier for people to share real-time, location based information and post location-aware updates.

This past December, on Christmas day Facebook was the most trafficked web site in the United States. Now it wants all of it’s users to become more open. Altering the default settings on millions of people’s status updates, in the hopes of making more Facebook updates public and searchable.

Get Ready for Location-Aware Status Updates

Sometime later this year Facebook will start to implement opt-in location-aware status updates. Knowing where your Facebook friends are having lunch or going for a run is a just as important, if not more so, than knowing that they’re doing it. So in much the same way that Foursquare shows you check-ins from friends and people checked in at events, Facebook will provide context around status updates in the wild, but on a much broader scale.

The social element of this voluntary disclosure allows marketers to tap into an engaged network of users and offer special promotions based on reported location. We expect FourSquare and other apps with a hybrid location/social-networking component to grow significantly in 2010.

Geo-Targeted Marketing

As the number of GPS-enabled devices continues to rise, expect to see a variety of innovative marketing solutions created to facilitate geo-targeting (i.e. in-aisle, in-store or in-proximity) and automated direct-marketing campaigns that are pushed to consumers with GPS-enabled mobile devices.

Business Will Capitalize on Location-Based Services

With the growth of location-based services and mobile apps, business now has the chance to minutely target consumers.

Of course this explosion of location based information will no doubt lead to main stream media stories of location-sharing gone wrong and will be used as cautionary tales for those who live their lives too openly. But once people begin to understand the value of connecting through location, more and more local business will capitalize on location-based services on social networks and mobile devices.

Conceived by veteran investors, kaChing allows users to create and manage a virtual stock portfolio with virtual money to see how it would perform in the actual stock market. Based on the portfolio’s earnings, risk-to-reward ratio, turnover and other factors, investors are assigned an investing IQ that measures their prowess, with the highest performers given Genius status. For a small fee, these Geniuses can have their stock trades automatically “mirrored” in real-time by other kaChing investors who can invest their own money into the portfolio.

The Good
•Transparency: Who wouldn’t be interested in knowing the secrets of successful investors? kaChing takes it a step further by disclosing how much of their own net worth the Geniuses have invested in the portfolios they’re managing — a thoughtful way to foster trust in both the Genius and the company.
•Engagement: All investors have message boards where they can answer questions, discuss stocks and wax poetic on market trends with other investors, further connecting the community.
•Innovation: kaChing is really the first website of its kind to marry social networking with finance in a way that’s potentially profitable for both the users and the company, a rare combination.

The Could Be Better
•Centralization: kaChing could use a community message board, an area devoted to stock research, a live news feed of Genius trades and a feed of the day’s top business stories. Hopefully a few of these will be added in the coming year.
•Product Placement: Admittedly, kaChing is not a place to sell products, unless that product is one’s own investment expertise, but the financial world extends well beyond individual stocks and kaChing would do well to explore these parts.
•Social Media: Where are the Twitter followers? As of this review, kaChing’s last tweet was in December 2009. And what about a Facebook fan page? There is a group page, though no one from kaChing seems to be monitoring it. For a site that’s built on the principles of social media marketing, kaChing could be maximizing its reach more.

With nearly $5 million invested in its portfolios — after less than a year in existence — kaChing is proving that peer reviews, even for something like stocks, can drive purchasing decisions. And in this climate of financial meltdowns, bank takeovers and shady accounting practices, kaChing’s allows investors the freedom to abandon the professional firms and put their money where their mouse is.

When someone else talks about your stuff, it's earned media

What exactly is earned media? I’m glad you asked. But first, let’s define paid media (sorry, it’s the best that Wikipedia had to offer). Paid media is just that. Exposure that you pay for whether it be television, print, radio, outdoor or online. If you paid someone to put your message there, it’s paid media. Don’t get me wrong, paid media is absolutely necessary and crucial to an integrated marketing mix. And, with the controls available today, you can reach a very targeted audience exactly where you want them for smaller investments than ever before. But, nevertheless, it’s still paid.

Earned media is the result of coverage, comments and conversation produced by press releases, chat threads, Facebook posts, Twitter tweets, blogging, commenting, reviewing, rating, social bookmarking like Digging, StumblingUponing (I made that verb up so don’t hate), Deliciousing (see previous parenthetical note), and video posting (I still love “Will It Blend?” and applaud Blendtec for doing it the right way) among other user-generated and brand-owner content development. Earned media is not completely free. You will most likely pay an agency like ours or an employee of your company to create, craft, post and manage earned media. If you are bootstrapping and doing it yourself, it still costs in terms of time and effort that could have been spent elsewhere. But let’s face it, you’d be paying to create the ads or media for your paid media on top of the actual media costs anyway. So, earned media still costs less.

Even better than costing less, earned media is more valid, engaging and connecting than paid media in a myriad of ways. It can come via a trusted third party – a friend, a media source, a blogger or a community you respect. It, by its very nature, sparks a dialogue that can open the doors for deeper connection. And, it engenders credibility (when done right, mind you) by offering information and conversation versus a come-on or enticement.

Word-of-mouth can be sparked by great paid media, but it’s the following earned media that makes it viral. Keep that in mind when you are planning and the word “viral” pops up.

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.

While not digital, these assets grab attention

One of the most interesting things we see happen time and time again – most recently with a film promotion – is the lack of basic digital assets. What are these? We’re talking a logo, a few banners, images, video, widgets, editorial content and whatever else you can provide your team and the public-at-large with to make their engagement with your brand or project more visually stimulating and relevant.

The more you have, the more they get used…and shared…and re-used on other sites whereby expanding your reach and awareness well beyond the narrow focus of your website and/or social media profiles. By the way, bloggers love to have assets to punctuate their posts. Most of the time, these items are quick and easy to develop. They can be created on an ongoing basis as other items are being prepared such as offline marketing materials, packaging or other online media. One quick side note while we are talking about creating – when you start designing, think about your social media profiles which, let’s face it, are de rigueur. Start building and skinning your Facebook or Twitter profiles while building everything else.

Oh and finally, if you want people to run with your brand (and remember, this is what happens with all successful brands anyway) you might as well make these assets easy to share. We love how Groupon kills two birds with one stone via their “e-schwag” widget-meets-banner.

Through this network, users can discover brands and products that may interest them based on the recommendations of their like-minded peers. The site also mixes qualities of Facebook and Twitter — status updates, photo albums, micro reviews, follower and friends lists — with its Yelp format, making it a one-stop shop for all things social networking.

The Good

• Viral goldmine: Clearly, the potential to reach consumers via Lunch.com is immense. And given that the site is still in its infancy, that potential will only continue to grow along with subscribers.
• User-friendly: Pages are exceptionally well organized and easy to navigate. Props to the information architect and designer. 
• Review ratings: Reviewers are ranked by their peers, based on the usefulness of their reviews, which helps produce product reviews that are actually useful, well written and less of the LOL/OMG variety.

The Bad

• Limited topics: Collectors of rare 18^th century stamps will probably not find other enthusiasts here. To cast the widest net possible, communities seem to revolve around the lowest common denominator, though interests will likely expand as the site does.
• Experts missing: Though peer reviews are helpful, when it comes to purchasing big ticket items like electronics, nothing beats the reviews of experts. Lunch would be well served by adding an “experts corner” or feed to CNET. A comparison shopping service also wouldn’t hurt.
• Timing: Had Lunch launched years ago, it might have been a formidable competitor to Facebook, but its arrival now makes it a little late to the virtual party. Alternatively, it may crush Facebook in the same way that Facebook crushed MySpace and Friendster. This seems an unlikely scenario to us as Lunch is less about friends and more about products, but ultimately time will tell and Lunch.com remains one to watch.

Check it out for yourself — Lunch.com — and then leave us a comment with your thoughts.