For any CEO or finance officer who remains convinced that ROI must be measured in all circumstances, may this serve notice on your misconception: Return on Engagement (ROE) is the primary measurement of success in social media.

The fact that 65% of businesses that have been using social media for 3+ years have created a detailed strategy indicates that, far from being an accidental omission, ROI is being pushed out of the equation by design. If ever proof was needed to make a seemingly self-evident point, this is it. If your boss suffers from ROI-Fixation Disorder, please make use of this table in their treatment. You might just save their business.

A couple of weeks ago I hosted a social media monitoring conference in Boston. As always, there was a heavy emphasis on PR monitoring and measurement.

We were lucky enough to have Katie Delayhaye Paine, aka the Queen of Measurement, as the keynote. She reiterated her belief that AVE (ad value equivalency) the traditional method of measuring PR value, has been made redundant by social media. In her view and, indeed, that of the majority of PR execs present, engagement is the new currency of social PR.

Now, engagement is evidently a tricky concept and measuring it requires some discipline. Katie recommends creating an Engagement Index (in Katie’s case, a Kick-ass Engagement Index) which is unique to your organisation and goals. This makes sense, but what should you class as engagement? She offered a sliding scale showing different forms of engagement, with their relative value – shown above.

I find this a useful approach – but I know it doesn’t work for everyone. I’d welcome any feedback you have on improving this.

You can view Katie’s full presentation here (listed under Oct 6th called “Are we Engaged Yet?”). If you’re interested in PR measurement – Monitoring Social Media New York is on Thurs/Fri this week and Monitoring Social Media London is taking place on 22nd Nov.

During that event and our subsequent Monitoring Bootcamp we analysed many of the leading monitoring tools, including Radian6, Sysomos, Brandwatch, Synthesio and SM2. We also suggested best practice for brand and reputation management and hammered out a framework for calculating and benchmarking the ROI of listening – which of course depended on what you were listening to and why.

A year on and the social media monitoring industry has dramatically developed. As happens in technology booms – and make no mistake, the social analytics market is booming – there has been a spate of acquisitions. Since Alterian bought Techrigy in July 09, Meltwater Buzz (which was reselling a white label version of Techrigy’s SM2 solution) acquired Buzzgain, a promising start-up co-founded by social PR guru, Brian Solis.

July this year saw, in my view, an extremely savvy deal, when Marketwire bought out Sysomos, the impressive Canadian solution headed up by Nick Koudas. Sysomos is a very smart piece of kit, so I wasn’t at all surprised to see them snapped up. But it was in May this year when Lithium, the social CRM company acquired Scoutlabs – a highly user-friendly social media monitoring tool, though one at the lighter-touch end of the analytics scale (where the likes of Nielsen BuzzMetrics weigh down the other) – that I think the most interesting development for the monitoring industry occurred.

As I mentioned in my previous post about social CRM, the big question for CEO’s whose companies are already monitoring the social web is now: how can we use all this data? By opening up their previously closed CRM databases to new flows of data from the web, companies can start to filter this new information to the people who can action it. In any fiercely competitive industry information is king and those companies that successfully grease the flow of information to their key decision-makers WILL be the winners.

I recently described social CRM as the end-game for social media monitoring companies – but it looks like rapidly growing social CRM companies, like Lithium and Jive, are going to subsume many of the monitoring start-ups before they mature. That said, the monitoring companies aren’t taking that risk sitting down. I know of several monitoring companies that are working with large brands to create complex, distributed systems to ensure that accurate, relevant social media data reaches the right people within their organisation in virtual real-time. Storing and enabling users to manage that data is, in theory at least, just one step away.

This is the topic I expect to dominate the discussion at our Monitoring Social Media conferences and Bootcamps in Boston, San Francisco, New York, London and Paris over the next 3 months – at least among the industry insiders. That said, there are an awful lot of big brands and agencies that are still only now getting to grips with social media monitoring and measurement. The “tools” and “brand management” questions will keep coming back time and again. We will also, doubtless, suffer the habitual cry of “Google’s coming!” and need to re-iterate the models for measuring ROI until they become a manta. Look out. Here comes the early majority.

UPDATE: I’ve just been reminded by @themaria that Attensity acquired Biz360 earlier this year too. Another smart acquisition in my view.