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What is Social Media ROI

Calculating social media ROI has been deemed as one of the tougher aspects of being a marketer. It’s not always the easiest to do because there are so many different meanings to what ROI may mean based on the type of conversion goals.

To simply put it—social media ROI is what you get back from all the time, effort, and resources you commit to social.

In order to track ROI, the key elements include:

  1. Identifying your monetary investment in social media
  2. Attaching a dollar amount to your social media goals.

How to Measure Social Media ROI

ROI = (return – investment) / investment 

This straightforward formula has just the two parts: Return and Investment.

How to Calculate Your Return

“Return” is one of the trickier elements of social media ROI because (as mentioned earlier) it can mean so many different things.

First, you must determine: What do you want to achieve?

What is your overarching goal with social media? And how can you specify the right actions that meet this goal?

Second: How much are these actions worth to you?

Step 1: Specify a goal

There’s a ton of possibilities for choosing goals and tactics to track. Here’s a list with some ideas:

  • New followers
  • Clicks on a link in a status update
  • Engagement (i.e. comments, shares)
  • Online purchases
  • Filled out contact forms
  • Email signups
  • Downloads of a PDF file
  • Time spent on an important webpage
  • and so much more!

Step two: Track your goal

Based on the resources you have, choose the goals you’re looking to achieve and track them.


Step three: Assign a monetary value

Once you’ve chosen a goal and tracked the actions, it’s time to tackle the dollars-and-cents side of ROI. There are several different methods to choose from here:

  • Lifetime value – How much do you earn on average from a customer? (There’s a quick calculator here, and a helpful article here.)
  • Lifetime value, multiplied by conversion rate – How much is each potential visit worth to you?
  • Average sale – How much is the average purchase through your site?
  • Pay-Per-Click (PPC) costs – How much would you end up paying if you were to use ads to achieve the same social media actions?

The PPC costs seem particularly interesting to me. Basically, you compare the amount you would pay in advertising for a new follower, click, impression, etc. and anticipate what you actually earn via your organic (not paid) social media sharing.

If it costs $0.50 to gain a single new fan to your Facebook page, then your organic gain of 50 fans is potentially worth $25.

Based on some experimentation and research that Buffer did, they found some benchmarks that might be helpful for comparison. (Best practice is to run a week-long campaign with social ads to get a baseline specific to your business.)

  • Facebook like average – $0.50 per page like
  • Facebook reach average – $0.59 per thousand impressions
  • Facebook click average – $0.50 per click
  • Promoted tweet – $3.50 per thousand impressions
  • LinkedIn – $2.00 per click

How to Calculate Your Investment

  • Your time or investment in a Social Media Strategist – Multiply labor-cost per hour by the number of hours committed over a given period (depending on whether you’re measuring social media ROI for the week, the month, per campaign, etc.).
  • Your social media tools – Add up the costs of all the tools and services you use for social media. Find the weekly or monthly costs using a bit of math (divide annual fees by 52 for the weekly cost, by 12 for the monthly cost).
  • Advertising spend – The amount you spend on social media advertising—boosting Facebook posts, promoting tweets, etc.

All these costs added together will equal your investment.

The key is finding the right things to measure and ultimately report for your organization. When trying to figure out what those are, remember that you will have two kinds of data.


Quantitative data is generally numeric in nature and can be used in true scientific analysis, with sample sizes of statistical significance and results that are repeatable.

Followers/fans: This is one of the most common metrics we see brands track. Be sure you’re not placing too much weight on this one. It may be gratifying to see growth, but if it’s not tied to something more meaningful, it’s just a number.

Engagement: An incredibly meaningful metric—perhaps one of the most important in measuring your own success and efforts—engagement can actually measure a host of different items depending on the channel. All of these different metrics combine to give you a sense for how well your audience is responding to your content.

Timing: Take a look at the timing of your community’s activity as well as your own. You want to ensure you’re active when they are. This is often overlooked, as many accounts are only managed during business hours, but that isn’t always when your customers are listening.

Click-through rate (CTR): Click through rate is a familiar metric for most Internet marketers, and it can be valuable in social as well—especially if one of your goals happens to be driving traffic back to your website. Think of it as a sort of social conversion that you can work to optimize.


Qualitative data is based on observations, and it often takes the form of hypotheses that stem from smaller sample sizes than you’d normally need for a true scientific study. These hypotheses can then be tested using quantitative data.

Influence: This one’s a bit controversial. Everyone wants to find their community’s influencers, but there is currently no universal standard for measuring influence or finding those people. There are several tools available that offer “influence scores.” (Klout and our own Social Authority are popular ones.) Though if you choose to use such a tool, you should have a good sense forhow it determines the score; you’ll want to ensure it aligns with what you are actually trying to measure.

Sentiment: Sentiment analysis attempts to measure the tone and tenor of a conversation around a stated topic or item. In social media, this is largely used to tell if people love, can’t stand, or are neutral about your brand or campaigns. Most sentiment measurement tools are automated these days, and if you choose to go this route, you’ll want to make sure you understand the methodology behind the tool—particularly the margin of error—to help you understand the context of your reports. There are also manual sentiment analysis tools out there to use. However, there are many drawbacks to these including labor costs and your time. Not to mention that a really great manual solution may be much more expensive than an automated one.

Conversation drivers: With the right tools, we can look at nearly any platform (or all of them for that matter) and see what people are talking about. When it comes to your brand, you’ll want to know the topics and context of conversations about you, your competition, and your niche. This incredibly useful knowledge can tell you, for example, who your customers see as your closest competition, what they’re sharing in relation to your product, their concerns, etc. This is one of the most important and insightful qualitative measurements you can use.

Ultimately, Figure out what you want to track, where you can track it, think about both current customers and new customers, and go do it.