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How to Measure Social Media ROI & Calculate It

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  • How to Measure Social Media ROI & Calculate It

Needless to say, social media has already become an irregular part of people’s routine life. And the advertising used in any kind of social media also changes to the modern demands of society, so when print and TV ads begin to lose their ground, digital advertising, however, goes on gaining its popularity.

To measure the products’ or brands’ real profit from the ads and social media, at present, it is highly important to analyze the ROI ratio of it. The higher it is – the bigger the sum of the investment gains will be.

So, in this article, we will have a look at how to measure social media ROI, analyze the benefits of the ROI calculation and provide you with the guideline for improving the ROI ratio of your platform or product.

What Is the Definition of Social Media ROI?

In general, ROI or Return on Investment is what you gain from all the investments (like the time, effort, and resources). Its roots are from the business, as they use ROI for summing and comparison of the profit gained from a certain investment.

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Taken from: https://stevens-tate.com

The social media ROI shows the results of any operation you commit to social, and it is best calculated in dollars. However, there are no profits from likes, retweets, or reposts so that’s where the business aspect of the social media investment starts, as you need to identify the goals for the social media investment to achieve success.

ROI Resources

The resources of social media ROI include three main points: time, cost, and effort. For instance, to get the total resources your business is investing in social media accounts development, give an answer to the following questions:

  • How many hours are spent working on the account development in social networks per week?
  • How much effort each week is put into that process?
  • How much money is invested into each social media campaign?

In short, these resource categories will show the efficiency of the social media campaign, if it is worth it or not.

Why Does Social Media ROI Matter?

According to the Entrepreneur recent research, social efforts tracking allows companies to quickly measure what is and isn’t working. Nichole Kelly, chief executive of Social Media Explorer claims that “Busy entrepreneurs’ time is precious and it is mission-critical to know what to do more of and what to stop doing in near real-time. The only way to do that is to track the results.”

When tracked correctly, the ROI rate may provide you with a core marketing strategy needed for business development.

How to Calculate My ROI for the Promotion?

Though it sounds too difficult for the first time, in fact, it is pretty easy to calculate your ROI having only two measures: the sum of investment and its return. However, to optimize the efficiency of your social network platforms it is important to build a powerful marketing strategy before counting your ROI for any of them.

Stage 1. Set the Conversion Goal

Each brand or platform has its own social media conversion goals to achieve, but any of them implies involving the customers for increasing the income of the company. Frankly speaking, that’s the main purpose of any company, though the ways of its reaching can be different.

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Taken from: https://blog.storyclash.com

For instance, here is the list of the conversion goals examples of Company X for their social promotion, made by Quick Sprout:

  • make an online purchase
  • download PDF or present free dissertation topics
  • sign up for the newsletters
  • engage in social media interaction (share, like, or follow as for example)
  • provide a feedback
  • watch the video
  • spend time browsing the important webpage

All these goals will help your business to get more money from certain actions.

Stage 2. Track the Changes

The next step is related to the analytics of your social media platform, which we must admit is different depending on their system peculiarities. However, there are plenty of apps that can easily track and analyze the key metrics needed for calculating your social media ROI, for instance, social conversion data can be found in Google Analytics. This tracking platform also provides detailed instructions to guide users through setting up social tracking goals.

Target Audience

One of the core elements for your ROI ratio is the number of consumers involved in your campaign. It goes without saying, that the audience reaching is the core idea of any social media marketing strategy. The more followers, fans, or group members you have on Instagram, Facebook, LinkedIn, or Twitter you have, the greater ROI you will get.


Also, it is quite important getting visitors from other websites where conversion happens for any social media strategy so as to widen the audience and increase brand or platform awareness.


Besides, during the conversions tracking you can turn your audience into potential customers. As a result, you will boost your sales and profit.


Perhaps one of the target goals to achieve for any social media campaign is to lead the followers from the social media webpage to the official website.

Conversion Rate

This point is useful for tracking the percentage of visitors by the social media platform and shows whether it is working or not. By analyzing the information about the audience’s preferences you can easily get the main idea of the product development as well as optimizing your marketing strategy.

Stage 3. Monetize the Conversion

Right now it’s time to assign a monetary value to each conversion, and there are two popular methods of its calculation. Firstly, you can stick to the historical data and estimate the conversion value based on the ‘worth’ of each customer. For example, if the average customer value is $200 and you know that 1 of 20 people who viewed your video become the customer of your platform, then the value of getting a visitor after browsing the video is $10.

In case you don’t know the historical data, then rely on your personal experience and sense. For instance, how much would you pay for the 1000 signups to your company newsletter? Don’t be afraid, you can easily analyze and revise the value when you have the hard data.

Stage 4. Measure Total Benefits

This step includes all the incoming traffic and conversion numbers from different social media, which you can collect from your analytics tool. It is a good option to create a spreadsheet that shows all the data with the monetary value of those conversions.

As an example, here is the Company X total data of the “Make More Money” ebook (the value per download is estimated at $17.50):

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Taken from: https://buffer.com

According to this information, we can make a conclusion that the best results of social media strategy are obtained from the Facebook account, but that’s not the end of our measuring, as there are additional fees we need to invest to get these numbers. So, the next step will definitely introduce this data.

Stage 5. Determine Total Costs

Well, to calculate the total costs from the campaign we also have to remind you to include the ads fees, labor costs, and various costs spent on the account development. As you can see from the total costs here, from $72,695 gained from the social networks we have to spend $68,135 for their development. As a result, the total sum of the money received from the social network campaign is $4,560.

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Taken from: https://buffer.com

Stage 6. Analyze and Improve Your ROI

Here is the final step of calculating your social media ROI, which can be also introduced with the next formula:

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Taken from: https://buffer.com

To provide a concrete example of calculating, let us go to the numbers got from stage 4 and stage 5:

how to measure social media ROI - How to Measure Social Media ROI & Calculate It - 6

Taken from: https://buffer.com

Due to the percentage of the ROI analyses, we can make a conclusion that this company has to focus on the Facebook social platform development and will get a great profit from the investments made (as it has been 171% so far).

The Main Benefits of the ROI Measuring

Okay, we have already found out the basis of how to calculate our ROI for social media, but are there any other reasons for starting tracking it? In fact, there are plenty of benefits for both consumers and brands to come closer to online marketing.

For brands, it is much easier to widen the target audience, increase brand awareness, and track all the changes. Besides, using the social media ROI can help you to get some ideas on how to improve your campaigns for engagement.

For consumers, it is much more comfortable to get the exact information about the things they are looking for and make the purchase at one click. In addition, they can also get some extra tips connected with the products they use while tracking the official pages of a certain brand or company. Another good advantage is that they can get some benefit from companies that try to outdo each other competing for the customer’s dollar.

Tips for Optimizing Your Social Network ROI

Additionally, we have prepared the best tips which will greatly help you to process the data and take the ROI measuring to the next level. So, let’s find that out.

Store Your Social Data

As you might have noted before, the ROI calculating includes huge data analyses, so it is highly important to store any of the aspects which can help you to get detailed information about each of the social networks and the marketing campaign in total.

That is why, beyond Google Analytics we also recommend you to have a look at the social dashboards to understand your performance, such as the most popular content type, the time and things which make your profile the most engagement, etc.

Run Test Campaigns First

That’s not a great secret that before putting a big sum of money in the campaign a lot of people try to make it at the test mode first. In such a method you will be able to get the core data for the efficiency analysis of each social network and make the strategy for future improvements based on the information received.

how to measure social media ROI - How to Measure Social Media ROI & Calculate It - 7 Taken from: https://www.searchenginejournal.com

This method can not only greatly help to find out which social network campaign is more likely to make the money, but also to test the paid ads like those on Facebook that can quickly blow out your budget if you aren’t careful.

Focus on Networks That Add Value

Nowadays to increase product awareness more and more brands and platforms go into digital marketing via creating official web pages on social networks. However, you might note that their accounts can be only found on popular social media and that does make sense. The reason is that it is really worth doing if the account is followed by a wide audience. If not, then it is just a waste of time, effort, and money, and that is why some brands focus on those platforms they can definitely find the potential customers and target on increasing the brand awareness.

Identify Business Opportunities Through Social Networks

In recent years, online shopping has become more and more popular among wide audiences. Due to the plenty of reasons for the stores going online, some social media platforms such as Instagram, Facebook, and YouTube have already included the feature of the product promotions to their apps. Thus, while scrolling the brand’s account you can also find out the product’s set number, size measures, and price, which have a great impact on involving the potential buyers to go to the official web page and add the product to the shopping cart.

In addition, it is much easier and more efficient to present the new product line and its punch lines via social networks, as you can share some great photos of the brand, and in such a way increase the chance to get the new customers from different communities. And there is no doubt that nowadays the products promoted using social network communities and accounts increase the social media ROI ratio thus making a significant influence on the total company income.

Final Word on How to Measure Social Media ROI

To conclude, the social media ROI ratio is a powerful element of the marketing strategy which should also be thought about while developing brand awareness and the number of its consumers. To calculate the ROI of your business there are two main measures: the sum of investment and the company income based on the investment.

However, to develop a strong plan for product promotion via the social network it is also important to find your target audience. For this purpose, the company needs to set the goal and track the changes of every platform account to get an idea about the consumer demands. After calculating the sums of investments and the total costs of every social network it is time to focus on the accounts, groups, or communities with the best engagement.

We do hope that this information will help you to get your business to the next level and wish you good luck!

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