Does Twitter drive business impact? Does your blog convert new customers? If you engage in every LinkedIn conversation in every group you participate in, does it leverage more leads than the banner ad you ran last month? More importantly, with the explosion of Web 2.0 Marketing, where should you put your efforts, you dollars, and your company message? And how?

Sound like a familiar conversation that’s been playing in your own head? Maybe with the added fear that everyone else seems to have a handle on it and you have somehow missed the boat! Well, you are not alone, and the race is on to get there faster and faster.

• According to a forecast from Forrester Research, Social media spending in the U.S. will increase from $716 million this year to more than $3.1 billion in 2014. Its recent “B2B Marketers’ 2009 Budget Trends” report finds: “Those who fail to embrace digital marketing face certain extinction by 2010 as new social buying habits and readily available online information shift purchase power from corporations to communities.”
• Joint research released by Ball State University, ExactTarget and E-mail Marketer’s Club found that 46% of e-mail marketing campaigns will use social media and e-mail in tandem this year, up from just 13% of all campaigns last year. The group rightly asserts that marketers who align their messaging with the distinct mindset of social network participants are likely to build a quality following in these environments.
• Eighty-one companies - 16% - of the 2008 Fortune 500 currently have public-facing blogs, according to a study by the Society for New Communications Research. Nora Ganim Barnes, co-author of the study, said: “It appears that those companies that have made the decision to blog have utilized the tool well. There is frequent posting, ongoing discussion and the ability to follow the conversation easily through RSS or subscriptions.”

So, as companies engage their audiences via social media tools, how do they measure their success? It’s difficult, because so many efforts don’t generate quantifiable results. But it can be done – only after objectives are set and the organization determines what they want to measure (corporate reputation, conversations or customer relationships, traffic, sales or SEO ranking, etc.).

Define relevant metrics for success and set goals based on those metrics. Quantitative metrics could include sales, leads, and qualified subscribers; qualitative metrics include satisfaction, loyalty, authority, interaction, and feedback. However, the goal is to participate in the conversation, to enhance the company’s relationship with its audiences and become a trusted member of its community, then the efforts’ measures should indicate whether they’ve successfully accomplished those things. The measurable objective that drives a measurement of ROI becomes the intangible thing — such as what came of the conversation, not necessarily a customer conversion.

There are companies working their way toward tracking social media ROI. Radian6, Brandwatch, SentimentMetrics, and others are helping to provide insights that allow companies to make more informed decisions about which social media tools to use and who they need to engage.