They want to use social media to find the pulse of the consumer: What do consumers think of my brand? How do they describe the competition? Are there any surprises or blind spots in my brand strategy?
These companies are not actively launching active social media campaigns that shape consumer behavior; they just want to know "what's out there." Social media is a feedback loop for such companies and hence social media monitoring is all they need. This achieves two purposes. One, they catch any major change in activity or sentiment pretty quickly, and two, it helps them get a quick (though not statistical) snapshot of what consumers think of them.
I think the above two are valuable but not hugely useful in the short term. A lot of people are talking about your brand (you would hope so) and very little of that is relevant or actionable. More often than not, the results validate what you already knew through market research and other means. And unless there is a major buzzworthy event, you probably will not see much change in the short term, anyway.
Over the long term, though, such monitoring can bring to light some brand attributes that you might not have considered or been aware of. So, stick with the basics metrics of amount of activity, type of sentiment and major conversation topics. Don't spend too much on anything more than that.
Another application of such monitoring is to get feedback on a particular aspect of your product or brand, answering questions like: What do consumers think of my ad? Do they think my product is too expensive?
Since the objective is much narrower, you can expect to get more actionable results out of this exercise. These can be especially useful for creative and messaging changes. The caveat to this is how buzzworthy or talked about the specific product attribute is. There should be enough activity out there to guide future decision-making.
Media selection is one area that most social monitoring tools in the market today don't focus on as much. There is a lot of emphasis on what consumers are talking about. There is also information available on where they are talking. However, the results of the latter are far too obvious: it is the social networking sites. This does not help a media planner buy in the right places (outside the social networking sites) or target better. Yet the insights for media planning are present ; they are just buried and not readily available in most dashboards or automated solutions. Further analysis (and dollars) are necessary to get to that information.
Now, we come to the other side. These companies are actively interacting with their consumers through social media. The questions they ask are: What is the ROI on my social media campaigns? Is it paying for itself? It is worth the effort?
The actively managed social media campaigns want consumers to take a desired action -- either directly or in the future (sales). The direct actions are easy to measure and hence calculate the ROI on. Direct actions like site visits, engagement, downloads and content consumption can be valued like any other form of direct response.
The indirect actions are more complex, of course. We hope that consistent social media campaigns will lead to an increase in overall share of voice in the social media space, an improvement in sentiment or conversations on the desired attribute and finally more product sales.
This is a valid approach and a pre-post analysis can usually be used. However, we need to remember two issues. One, social media campaigns aren't about broadcasting your message. They are about building the trust and credibility within your target. This means that they take time. Second, social media campaigns are usually a really small percentage of the overall marketing investment and effort. Thus, the results, especially sales impact, might not be readily visible (I am guessing this is what you will see if you put it in you media mix-model). Thus, you might have to use proxies (like change in product consideration) to get to an ROI.
Going back to the basics of all measurement, less is more. If online media is information overload, social media can easily put it to shame.