There has been a lot of discussion about social media ROI lately - everyone is pushing very hard to figure out how it can be used to make money or reduce costs. Fundamentally we need to start any investment initiative with the goal of making more or spending less so the ROI conversation is very important. However, as an analyst I often had to chuckle because we hear very little from the companies making a lot of money (with high margins) off of social media and online communitities - companies like The Knot, Match.com, and UTest. Why? Those who have figured out the puzzle have no particular need to share their secrets and in most of the examples I know of they are market disruptors, not established brands.
The other reason I shake my head is that the ROI discussion doesn't include the discussion of time frame often enough and that is where the real challenge for companies lie. In most business use cases that social tools are applied to, the revenue or cost impact is not returned directly. Instead social initiatives require constant investment for a period of time before the returns accumulate. When they do they can grow quite quickly but if the organization does not understand the investment period required, they can easily cause themselves to fail by being too anxious for the returns to manifest. And this aspect of social media is really, really hard for large organizations to manage, particularly in the marketing and customer support functions. In large part, the business processes, infrastructure, and resources of marketing and support are not set up to support initiatives that have off-set returns. To get around that hurdle, outsourcing seems to be a good choice but that often means a time-bound project where both companies and their vendors push for returns in a relatively short period of time which can result in a long-term negative impact on building a community of advocates.
ROI is important but if the dynamics of social initiatives and how they produce results are not well understood it is quite easy to force failure before you give projects the space and time they need to succeed.
As an analyst who is now running my own business I have been fascinated by how large the marketing ROI really is when social media tools are used effectively but it has also reinforced the fact that the returns are slow to ramp at first and accelerate over time. Judging the results too early would have definitely made the investment look like a failure.