Companies are still grappling with the issue of measuring social media, though fewer are reporting that they are unable to measure ROI (37%) compared with 47% last year. 

For our State of Social 2011 report, produced in partnership with LBi and bigmouthmedia, we asked more than 1,000 online businesses about the challenges of social media measurement. 

Here's a few highlights from the report...

Understanding of social media ROI

41% of company respondents report that do not have an ROI figure for any of the money they spend on social media marketing, while 26% say they can attribute an ROI figure to a tiny amount of the money spent on social media.

Just 8% can determine ROI for all of their social media spending. 

For how much of the money you spend on social media do you have an ROI figure?

But is ROI the be-all and end-all? PR consultant Stuart Bruce has an interesting take on this issue: 

It‘s a reflection of the immaturity of social media that some people are still obsessed with the notion of measuring ROI, when in fact they don‘t have any true or accurate means of measuring ROI across most of their business activities – but because those are mature and have always been done don‘t face the same level of scrutiny.

While 37% aren't able to measure the value of social media, 19% say social media is more worthwhile than other marketing activities, 20% report it is less valuable, and 23% indicate that ROI is similar to other marketing activities.

These findings echo those from an Adobe survey released last month, which found that 78% of European marketers were unhappy with social media measurement. 

What metrics are being used to measure social media? 

The three most important social media metrics, according to our respondents, are direct traffic from social sites, brand awareness, and customer engagement. 

The top three metrics have little to do with ROI, while sales is considered to be a less important metric than you might expect. Just 15% felt this was important, though 29% cited this in last year's survey. 

Which are the most important metrics when assessing social media activity for your organisation?

As Econsultancy's Chris Lake notes in a post on social media measurement, "the key to measuring social media is to track all of the usual ‘hard’ metrics, but it’s also to step back and correlate performance against the major business KPIs".

How much traffic you can generate via social media is certainly worth measuring, but companies mustn't become too fixated on this, as there are other, perhaps more valuable, social media metrics. 

Other findings from the report

Bigmouthmedia has put together this infographic which contains some key stats from the report which was launched at the agency's Social Summit event earlier this month.

Despite measurement issues, 79% of companies are still planning to increase their investment in social media over the next year.