Having worked client side for over 10 years before joining We Are Social, I totally get the ROI culture of most companies – this is how things work, especially in these recessionary times when every penny counts.

The frustrating thing is that measuring the ROI of social media is tricky (as Scott Monty, Ford’s head of social media famously said “What’s the ROI of putting your pants on in the morning?”). However, I joined a social media agency not only because I am passionate about social media but mostly because I am 100% convinced that social media 1) will become a core activity for businesses of all shapes and sizes and 2) it will transform the way companies operate. To me, social media is a long term commitment.

With that in mind, Chris Lake draws a very interesting parallel between social media and e-commerce:

We’re still hearing a lot of hype about something that is unproven, in ROI terms. That remains true, although some companies are generating ROI today, whereas others may take a hit before seeing a return. If you buy into the idea that this might work, then you need to be prepared to wait in order to see some positive results.

There are parallels with the great leaps into e-commerce a decade ago (amazingly some retailers have yet to dip their toes into the water). The cynics at the time doubted that selling things online would ever become a mass market no-brainer, as it is today. I wonder if the same applies to adopting social media?

There’s no doubt that the internet has done wonders for many companies. Tesco may pull in around £2bn of sales from its online operations this year, and perhaps £100m in clear profit. And John Lewis now counts its website as its biggest store, ahead of the huge ‘flagship store’ on Oxford Street. If that’s not progress, I don’t know what is. Not that it happened overnight. ROI obviously wasn’t generated immediately. Both Tesco and John Lewis needed to pony up a large wedge of development money in order to set up their websites, and to recruit appropriate people to run them. They had to pay to play, in order to transform their businesses.

The next decade will be the age of customer engagement and customer satisfaction. Don’t want to miss out on the next big revolution? Then start engaging with social media now.

Econsultancy have published a good overview of the economic outlook in 2009 for the digital marketing industry, with one of the data sources quoted being Wednesday’s eMarketer report predicting 7.2% growth in UK online ad spend.

Just like the Group M report earlier this month, although there’s bad news for those in the industry who have yet to wake up to the changes that social media is bringing to people’s behaviour, there’s good news for those of us that have:

Time and time again, when we meet with companies, we are asked about social media marketing strategies. Whilst this covers social networks, it is likely we will see a rise in businesses actively trying to engage with users through other social means online.

Tying in with the forecast that social media will continue to grow, is that despite a recessive economy, online marketers will look to alternative ways of measuring success – rather than just a standard ROI model.

This has been mentioned before, but to recap: measurements of success also include customer retention and satisfaction (all the more important in a recession), the rate of customer acquisition and the net promoter score.