Ashley Kingsey
Ashley Kingsey
What Is Social Media ROI and How to Measure It?
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Promoting your brand on social media can be a real time sink. At the end of the day, managing multiple social accounts, creating original posts, and engaging with the audience online is a lot of work. And let’s face it, social media marketing isn’t cheap too, especially if your strategy is based on paid advertising.

But do you know for sure how effective your social media efforts are? Do they bring you the desired results? And most importantly, what kind of results do you expect to achieve? Measuring your social media ROI can answer all of these questions and help you systemize and optimize your social media marketing. 

What is social media ROI?

Everyone who deals with marketing knows what ROI stands for. The abbreviation means return on investment, which is a percentage that shows how much revenue is generated from a specific amount invested in a marketing campaign.

The standard formula to calculate ROI is:

Revenue / investment X 100 = social media ROI

However, when it comes to social media marketing, the idea of ROI is not always as straightforward. Why? Because investments in social do not necessarily result in a monetary gain. In fact, the goals for which marketers usually invest in social media are not about immediate conversions or direct sales. The research on social media ROI shows that, in addition to customer acquisition and lead generation, most businesses are interested in:

  • Increasing brand awareness;
  • Enhancing customer engagement;
  • Customer retention;
  • Customer segmentation;
  • Improving customer support;
  • Driving more website traffic;
  • Community building, etc.

The results of such SMM campaigns are often hard or even impossible to measure in monetary terms. Hence the difficulty of calculating their ROI. For example, you can measure customer engagement in likes and shares, but you can hardly say for sure whether they have any impact on your revenues.

This is why measuring social media ROI is generally considered to be a tricky task. No wonder that 60% of marketers say that calculating ROI is among their top three challenges in social media marketing. Meanwhile, 44% of CMOs admit that they fail to measure how social media presence influences their business.

Why does measuring social media ROI matter?

Despite the difficulties associated with calculating social media ROI, the necessity of doing it persists. Just like any other marketing activity in which you invest your money or the money of your stakeholders, social media marketing calls for financial accountability. Unless you have a clear picture showing that your money is capable of generating even more money, what’s the point of spending them?

In other words, high ROI serves you as proof that you’re heading in the right direction with your social media efforts. Low ROI value, on the other hand, would suggest that you’re doing something wrong and need to revisit your SMM strategy or at least cut down the costs.

Besides, measuring ROI is a good way to figure out your ultimate social media goals, decide what exactly you want to achieve, why, and how your business will benefit from it. This is the first step toward your understanding of how to measure your social media ROI correctly.

How to measure your social media ROI?

Despite its complications, measuring social ROI is not an impossible task. It requires a clear understanding of your goals and spendings, as well as choosing the right performance metrics. As long as you know what kind of effect you want your social media marketing to have on your business, you will be able to measure it. Here’s how you do it.

  1. Outline your objectives

First and foremost, you need to realize why exactly you need to grow your presence on social networks. It is important not only for calculating your ROI but also for the overall effectiveness of your campaign.

Your objectives should reflect the general purpose of your social media efforts. What is it that your business needs or misses out on that social media can provide? Is it more leads and conversions, public exposure, customer engagement, website traffic or improved customer service? Based on your objectives, you’ll be able to set specific goals for your SMM campaigns.

  1. Specify your goals

Unlike objectives, which are more general, your social media goals should point out what exactly you need to do and when set very specific milestones that you will attempt to achieve throughout the entire cycle of your campaign.

For example, if your objective is just increasing brand awareness, your goal can be as simple as acquiring more followers, likes or shares. If you set out to drive more traffic to your business website, aim at getting more visitors through your social links. And so on.

The idea is to make your goals measurable. It is true that most of your activities on social media will have a qualitative effect on your business: you know it is there, but you can’t say how exactly it reflects on your revenues. But to calculate your ROI, you need a quantitative indicator to measure the performance of your campaign. And it is best to use the indicators that point directly at conversions and sales (e.g., number of purchases, trials, sign-ups, etc.). However, when it comes to social media, ROI is a relative value, so instead of revenues, you can use other indicators to measure your performance.

It also makes sense to include specific targets and timeframes in the formulation of your goals, e.g., get 1000 trials from social media by the end of Q1. This will allow you to evaluate the effectiveness of your campaign adequately.

  1. Identify the right performance metrics

Setting goals goes hand in hand with choosing the right metrics for measuring your performance. The most obvious way to assess your social media outreach is to keep track of the number of your followers, likes, and shares. These are called “vanity” metrics, but they are not useless. It makes sense to keep an eye on them if you need to evaluate your overall social presence, follower engagement, and general brand awareness.

However, if you set out to measure more specific goals, there are other metrics to consider, including:

  • Revenues;
  • Conversions;
  • Sign-ups;
  • Leads generated;
  • Website traffic;
  • Clicks;
  • Views and impressions, etc.

As long as your metrics align with your business goals and are based on the actions your visitors/followers take to interact with your brand, you can effectively use them to calculate your social media ROI.

A lot of valuable metrics can be monitored with the help of third-party analytical services, for example, Google Analytics. Other quantitative data can be obtained through the tools embedded in the social platforms, e.g., Facebook Analytics or LinkedIn Analytics. If you’re running ads on social networks, you can easily track metrics like clicks, views, and impressions by using these inbuilt tools as well.

  1. Add up your spendings

In addition to the revenues or benefits you managed to attain with your social media marketing, you need to be clear about all the expenditures associated with it to calculate your ROI. Here are common spendings you should take into account:

  • Content creation: How much did it cost to develop content for your social media posts? How much money did you invest in your company blog? How much did you pay to your in-house writers/freelancers? Remember that content is not only the text. It also incorporates visual content: photos, images, videos, GIFs, etc.
  • Employees: Calculate how much you spent on your SMM team. Don’t just sum up annual salaries. Instead, focus on a specific campaign. Find out how much time it took and measure the investment made within this timeframe.
  • Social media tools: While using social media platforms for business is mostly free, social media management software can be quite costly, and you have to add this expense item to your total when measuring your ROI. Again, calculate the costs with respect to the time your campaign actually took.
  • Social advertising: Paid ads and promoted posts make the final share of your investments. You can easily check how much you spent on advertising in the platform’s ad dashboard.
  1. Put it all together

When you have all the relevant data collected and documented, it’s time to do the calculations. Remember the formula mentioned at the beginning of this article? This is how you determine your social media ROI:

Revenue (conversions, leads, visits, etc., depending on your business goals) / investment (the cumulative amount of all your social media spendings over a given period of time) X 100 = social media ROI


Since social media marketing tends to bring your business qualitative rather than quantitative benefits, which are not always translated into sales directly, measuring its ROI can be a challenging task. However, social media ROI is not an absolute value. So as long as you align your social media goals with your business objectives and choose the right metrics to measure your performance, determining your social media ROI will not be an issue for you.

Ashley Kingsey

Ashley is a SEO specialist at Ning.