With all buzz around Social Media you've properly discussed it in your company or with your media agency now or then. And they offered you to create a Social Media strategy and execute it for you. While it is a great idea to let them develop a plan for you - as you have bigger problems to worry about - you should not let them execute it for you: it won't work! No matter what you agency is promising you, it won't work. They can support you, come up with ideas and train your writing skill and how to behave in certain areas of Social Media, but they should never be in charge of execution.
And the reason for this lies in the deep root of Social Media itself. As I already said 8 month ago, Social Media is communication boiled down to its basics: you communicating with your customers. If you let others speak for you, it's simply not you the customers talk to - with all it's downsides; You don't know what your customers are concerned about, the media agency isn't able to help the customers properly (as they are not in your processes of your company) and most of the time agencies don't even have a clue what they are talking about. While they might be experts in PR and communication, you are the expert in your field, you should be the one talking.
But the most important of all reasons is; Social Media requires honesty and you can feel whether there is someone behind it who actually cares (for the customer, the company and/or the brand) or just a phony media agency trying to pretend to be you. This drives customers away. But even if they stay they talk to a pretentious ghost writer, someone they can barely connect to. So they won't get emotionally attached to you nor your brand. Ever. Period.
So keep it in-house by the people working and actually caring for your brand. Even if you are not a nobel prize winning writer - consider this: I'm not one either! - you're the only one able to express what you want and need to say. Everything else is just wasted money.