Two of my esteemed colleagues have weighed in on a misconception that has been promulgating the marketing community: that social media marketing is somehow free. Well, it isn’t. Both posts below make great reading. With many, many successful social media marketing executions for major brands under his belt, Pete knows what he’s talking about.
Continuous Beta by Pete Spande: Social Media Marketing Isn’t Free but it is Terribly Efficient

The benefit of Social Media isn’t the initial cost it is the return. If you invest time, money, and energy into a conversation with your potential customers you build equity with prospects at a scale that becomes extremely meaningful. As you build these relationships, you gain the ability to get more out of that relationship. They will share their feelings with new prospects, they will defend your brand in place you can’t, and they will amplify your message.
Marketers, I share your frustration of many with the expectation that social marketing equates to (virtually) free marketing and the unrealistic expectations that come along with this. This commonly held perception does open the door to a very compelling discussion around efficiency and value and that is one we all must engage in. Let’s have that discussion.

John Battelle’s Searchblog: On Marketing in Social Media, and Meals

Social media marketing is about brands acting, well, social. Which means they need to show up to the party with a nice bottle of wine, if that’s what the party calls for. They need to come ready to have a dialog, and add value to the event.