I provided a short answer to what drives Social Media ROI on Quora earlier today which generated an immediate response. I’m going to flesh out my answer, as I think many brands and businesses are struggling with identifying social media ROI. Before you even think about social media marketing ROI you have to create and launch a campaign and should be aware of these barriers to entry.

• Remember the old saw: “time takes time” - well this is true of social media marketing. It requires an investment of time, which is increasing every day, as more and more jump into the market. It’s a marathon with the characteristics of a 100 yard dash!

• Effective high impact social media marketing campaigns require a knowledge of specialized marketing processes and platforms (YouTube, Twitter, LinkedIn, Facebook, Yelp, Flickr).

• You should have a good understanding of content development and curation, coupled with a good web site structure that inculcates good SEO fundamentals.

• Social media marketing is starting to draw a crowd - the low barriers to entry are disappearing. Meaning, your brand messaging has to stand out above the digital hubbub.

Now that I’ve hopefully give you a sanity check about the big picture challenges lets dive deeper into social media marketing ROI metrics. Big picture capabilities:

• Creates Buzz and Brand Awareness if outbound marketing is done creatively.

• Gets Targeted Customers talking about your Product and Services via Social Communities.

• Enables you to Build a Social Presence within these Communities, driving competitive barriers to entry.

• Track brand engagement (note my recommendations for platforms and services below).

• Monitor Competitors - remember they are doing the same on their end.

• Use Social Communities as a product feedback loop that’s second to none.

• Will push your organization to embrace new and challenging Marketing Methodologies, which in turn improves the DNA of your brand/organization.

• Give you the ability to measure positive Social Sentiment (or negative).

Tangible ROI Measurements for Social Media Marketing:

• Revenue

• Customer Acquisition

• Generate Keyword Rankings and Related Search Traffic

• Drive “real time search” traffic via Keywords in Social Streams

• Cross Promote and Curate Content to Drive Search Rankings & Visibility

• Utilize Social CRM to Engage with and Solve Customer Problems (Support)

• Identify Customer Influencers & Market Directly to them

• Move Ecommerce Initiatives into Social Stream to Minimize COG

• Utilize Social Stream/Communities to Measure KPI

• Drives Blog & Newsletter Subscribers

• Leverages Content Development Costs

Market Leaders  involved in Social Media Marketing ROI

• Radian6: http://www.radian6.com/

• SproutSocial: http://sproutsocial.com/

• Awarness Networks: http://www.awarenessnetworks.com/

• People Browser (Research.Ly): http://www.peoplebrowsr.com/

• PeerIndex: http://www.peerindex.net/

• Klout: http://www.klout.com

• Lithium: http://www.lithium.com

• Lexalytics: http://www.lexalytics.com/