Small companies are also jumping on the bandwagon. Used-car company Auction Direct created a minicampaign based on a viral Facebook posting in which a woman purportedly quit her job by writing notes on a whiteboard. Eric Miltsch, the company's IT and Internet director, used Photoshop to strip out the original words and insert his own, making the woman appear to be talking about her recent car-buying experience. After he posted the doctored slide show, traffic poured in. That spurred sales, but the real goal, Miltsch says, was to offer something auto-related that is entertaining or informative so that "people remember that it came from us."

Bang vs. Bucks
When it comes to assessing the ROI of social media, companies generally have to be content with identifying a positive impact on customer engagement. It's difficult to correlate engagement to the bottom line, which is why some senior executives still aren't sure whether they want to make the investment, says Jeremiah Owyang, a social-business analyst with Altimeter Group.

But investments don't break the bank. In an October 2010 Altimeter survey of 140 firms with more than 1,000 employees, those that identified themselves as beginner or experimental users of social media spent an average of $66,000 a year. Those that made the transition to a formal program with dedicated head count spent $1 million — still typically less than 1% of their overall marketing spend, says Owyang.

"The promise of social media is that if you do it well, your customers do the work of spreading the word for you, so we should always expect these dollar amounts to be small," Owyang says. "And if you do it well, you'll get more return than from traditional media."

David McCann is senior editor for human capital and careers at CFO.

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