The standard advice on social media is to listen first, and if you read this blog, you've noticed that I pay a lot of attention to the companies who can help with listening. Despite the articles that group them all together, it's important to note some distinctions. The most obvious is between service- and software-oriented approaches, which differ in emphasis even in companies that offer both.
Further to your comments, we have learned over the years that social media reporting is most effective when it functions dynamically. Whether that be for sales automation, or leveraged as a PR device."It depends"
For agencies, the advantage with online reporting tools means that any postponed meetings with clients won't require placing a second order for our custom reports, or showing them a week-old report absent of incidents which may have happened in-between rescheduling.
The same applies with our experience in sales automation - the "freshness" factor is where the aforementioned client found the real value of using SM as a sales tool. Again, this may appear to be going above and beyond, but there was one incident where a rep had won an account when he passed his tablet around the meeting room, revealing a timely blog incident that the prospect knew nothing about.
In the decision between tools and services, everyone's least-favorite consultant answer applies. As Joseph points out, software used by the client has the advantage of near-real-time insight. You can look at what's happening in the very recent past (minutes), and you can explore the data interactively, versus waiting for an outside analyst to answer your questions.
On the other hand, the professional services approach offloads the learning curve and resource requirements that can be an obstacle. You gain the experience and insight of the specialist, in exchange for some loss in response time and flexibility, and the cost structure is different. If your company doesn't have information producers ready to do the analysis internally, you can still benefit from listening strategies with outside help.
The right tool for the job
It's a tradeoff—both approaches have benefits and costs. The question (as always) is, what are you trying to accomplish?