When Facebook hit the scene for businesses, everyone was in a frenzy to get a Facebook page and businesses spent countless hours and dollars listening to self-proclaimed “Social Media Experts” on what they should be doing. Almost three years later, these experts are still grasping for some kind of evidence that their advice is generating a return on investment for their clients.

I’ll admit, when Facebook Business Pages started getting popular, I was convinced this was going to change the map. Finally, something to shake up our conventional thought-process and get businesses to interact in a new way and change the competitive landscape. Well, not quite.

The Good

Social media has done one amazing thing for businesses: it’s forced them to rethink customer service. Everyone (for the most part) has gotten better at it. Don’t like the customer service you received on the phone with your cable company? Go post to their Facebook page where thousands of their “fans” are watching. Unhappy with how you were treated on an airline flight? Tweet about it.

Social media has forced businesses to think about their customers and to get better in how they interact with them. When complaints and disagreements come up, the world is watching. If you really want to grow your fanbase, respond flawlessly and ramp up your customer service chops. One happy fan will bring in many more.

The Bad

Where social media has failed for many businesses is showing real ROI for the amount of time required to pull off robust social media campaigns. Sure there are great examples of the Old Spice’s of the world, but these are few and far between. For the run-of-the-mill small business, social media hasn’t really done much in terms of showing it is worth the money you spend to stay involved. Facebook's own statistics show that only 17% of your fans see any of your posts. You should check out the referral traffic Facebook brings you in Google Analytics to see how many of your fans are visiting your site each month. It may be a lot lower than you think.

The Money

If you run an ecommerce site, it is definitely worth looking at the per visit value (PVV) of your Facebook referrals in Analytics. It all comes down to simple math. If you have 2,000 visits monthly from Facebook, and each visit on average is worth 50 cents, your net revenue from Facebook is $1,000 per month. If you're paying a social media "expert" $500 every month, chances are very good that Facebook marketing is costing your business money, not making it.

If you provide services, there are still ways to track how many leads you receive from Facebook referrals. Often, the simplest way is to ask new clients or customers, "How'd you hear about us?" In addition, more and more sophisticated tools are allowing for online lead tracking, so you can determine where every lead comes from and how much revenue each lead generated.

It's true that some of the money you spend on Facebook will go toward "branding impressions" that won't be captured directly in referral traffic revenue. A fan may remember your business when he or she is ready to shop, weeks or even months down the line. On the other hand, some of the revenue that comes from Facebook traffic likely would have been booked anyway, even if you had no Facebook page. The important point here is that you should never lose sight of the ROI of your Facebook marketing efforts.

Making Social Work for You

Social media does work well for some things. If you have a significant fan base, running monthly “Facebook Only” specials can generate business but you'll have to do much more than this to keep fan interaction high so that when you do announce a deal, it will get good placement in your fans' news feeds. And even with good involvement, Facebook continues to ratchet down how many fans you'll be able to reach organically, so you better be ready to pay to get the word out on special offers.

Social media also can be a good link-building tool. No spammy links, no talking about who you had over for dinner last night, just a solid sentence or two on a topic related to your business with a link back to your site. It's a nice platform to supplement your other search marketing tactics.

Summing up, if someone tells you that you need to get hot and heavy into social media, ask why. Question each statement. Why do I need to be on Twitter? What good is it really going to do me and what will my potential ROI be? Get them to show proven examples on how it made money for a company like yours and how it directly applies to your business.