How to measure Social Media ROI

“You simply cannot measure Social media ROI” – this is a quite common misconception among the people. Like billboard advertising, a lot of businesses just tend to go ahead with their campaigns and hope that their valuable efforts will pay…

Social Media

“You simply cannot measure Social media ROI” – this is a quite common misconception among the people. Like billboard advertising, a lot of businesses just tend to go ahead with their campaigns and hope that their valuable efforts will pay off. While it is true that measuring ROI is complex, it is not entirely impossible! And the reason why it’s so difficult is that most of the time social media is measured by success examining metrics such as tweets and likes which are not easy to monetize. Whereas, they should be rather focused on calls, email subscribers, website visits and sales because these are the things that businesses are most concerned with.

Arguably, ROI is among the toughest to measure in the world of digital marketing. One could never exactly tell how much could be earned from one Instagram post, or if a post on Snapchat could increase your sales. According to Convert more and Convince, around forty-one percent of businesses have no idea if their Social Media efforts are worth it. Though, it is true that identifying ROI can sometimes be a tough nut to crack, it’s not impossible either. In order to keep an eye on your returns, you need to first have a firm grasp on what Social Media ROI is, how it is relevant to your business and how to measure it effectively.

What Is Social Media ROI?

In case you’re not familiar with what ROI is, it’s basically Return On Investment on the efforts made. The term ROI has its roots in finance and business. This method is mostly used to identify dollar returned on dollars invested. It’s used to analyze what you’ll get back from the resources, efforts and time you put into anything (in this case Social Media). To get started, you need to first understand the amount of return you get from all of your Social Media marketing initiatives. What this means is, first you have to realize how much time, value and money you invest and how much money those efforts are worth.

The importance of understanding Social Media ROI

While a lot of businesses and brands don’t bother understanding their ROI, let’s have a look at why constantly tracking your ROI could prove to be extremely vital for your brand. By understanding ROI, you will be able to:

  • Get rid of those time-consuming social media marketing strategies that aren’t working.
  • You will be able to put all your energy where it is most effective.
  • You will have a decent idea of which platforms are beneficial for your business or brand.

Let’s say, for instance: A clothing brand might be able to generate better results by putting all of its social media marketing efforts on Pinterest or Instagram. While a food brand or a restaurant would best work with an engaging and creative Facebook presence. In simple words, your ROI is your best guide on what’s helpful and what isn’t.

How to measure your Social Media ROI?

There are some steps that you need to follow in order to accurately measure your social media ROI.

STEP ONE – Earnings

Describe, measure and record your goals. But hang on, before you jump on to measuring your returns, you need to first have a clear idea about your objectives. You need to make sure your objectives are linked to your campaigns and are quantifiable. Simply put, ensure that a number could be assigned to the objectives. They could be downloads, registrations, email lists, purchases, etc. Moving on to your goals, make sure that your goals are call-to-actions, something your customers would do. Don’t try and prevent any metrics. Likes and shares might be cool, but they shouldn’t be your primary goal.

Now that you have certain goals in mind, your next step is to keep an eye on them. This part is quite crucial to measuring your Social Media ROI because it helps you realize how your audience is responding to your digital marketing strategies and efforts. And to keep a track of that, you could simply use Google Analytics. This could be used to set-up goals and identify the decisive contribution of each goal to each performance. You could start by putting dollar amounts on every single profitable goal that could be reached. This would enable you to examine how much money you made from each of your Social Media marketing efforts.


This goes without saying – keep a track of how much money you’re spending. To figure out whether you’re producing negative or positive ROI through your Social Media campaign, measure how much money you are spending on it. There’s a specific way of measuring the cost. Here’s how to do it.

Some key figures that should be included in your calculations are as follows.

For every hour you’ve worked on your social media marketing strategy, put a dollar value on it.

Cost of Content development 
A lot of people mix-up this section, so it’s important for you to stay alert and keep a record of how much you’re spending on creating your content. Write down how much did it cost you to hire a writer or a graphic designer.

Social Media tools
In this part, count all the extra tools you used for tracking down your Social Media performance.

Advertising cost
Sometimes we tend to forget to factor in the advertising cost while calculating. So, if you had any of those “sponsored posts” don’t forget to add in their costs.

STEP THREE – Calculating Returns

At this point, you must have figured out your costs, now it’s finally time to move on to the most vital part of your calculations – calculating your return. The most basic social media ROI formula appears as follows:

Profit / Investment x 100 = social media ROI %

Profit – the money you’ve earned from your social media marketing efforts

Investment – the total cost of your social media marketing efforts

While it’s easy to apply this formula to calculate your monetary profit, things get more complicated when your investments bring intangible results – for example social media mentions or ebook downloads.


There’s absolutely no doubt whatsoever that you can calculate your Social Media ROI for whichever platform you want. And after analyzing these results, you would be able to come to the final decision as to which social platforms you should put your efforts on, and which you should completely skip. However, apart from these numbers you also need to recognize the secondary results of your efforts. For instance, your users might be creating awareness and producing content that others are seeing. Though it could be tricky to measure such results, they could have a positive impact on your final ROI. Simply put, in order to measure your Social Media ROI, understand the numbers and their impact on your performance.


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