A Short Ultimate Guide To Measuring Social Media ROI

April 18, 2017

Have you ever thought about the returns you probably get from the investments made in social media marketing? If not, it is high time you start measuring your social media ROI. Social media ROI is the reward your business or organization gets from the social marketing efforts. All the investments of money, time and effort you make, brings you an outcome. What is that output? It is the revenue earned from social media marketing which is termed as social media returns.

You can measure your social media ROI using a simple formula:

Money Generated From Social Media – Investment Made = Social Media ROI

Another way to calculate your social media returns is by considering the ratio between cost and benefits covering things like:

  • Training
  • Social media technology
  • Labor
  • Development
  • Kind of business
  • Social media advertising budget
  • Agencies and consultants

What is The Need for Measuring Social Media ROI?

Don’t you think it is important to know if your efforts made are put in the right place? Of course it is, for you, your clients and the social media companies themselves.

Your return on investment (ROI) is the evidence of your marketing efforts. It shows if the implemented efforts work well in direction of your business growth. To explain it in brief, here are some reasons you need to measure your ROI:

  • You can know the areas of improvement.
  • You can see which social media channels contribute for the major part of your total revenue.
  • You can keep a record of how some particular changes can affect your social media goals.

Measuring Social Media ROI

3 Best Ways to Measuring Social Media Marketing ROI

The main milestone in measuring social media success is staying updated with the algorithm changes and implementing the new marketing tools.

Follow these effective steps to measure your ROI:

1. Create Social Media Campaigns

You can create your social media campaigns in different ways such as business lead generation, revenue, clicks, contest entries, customer acquisition, etc. Along with these, it also depends upon your social media goals. You need to set definite goals before tracking and measuring your ROI to determine your success rate.

You should define goals that are calculative and attached to a particular social campaign. To make it clearer, they should be something you can link a number to, such as:

  • Page Like and Sign-up
  • Contact forms
  • Trials
  • Email list sign-ups
  • Purchases
  • Downloads of an eBook or whitepaper

For calculating the exact digit of your social media ROI, you must set your goals depending on the actions that ultimately convert into new customers through lead generation. Merely a click is not sufficient to achieve your goal; you need to track if those convert into your potential leads.

The second important thing is getting your goals linked with relevant campaigns. It is where even the most experienced marketers fail. Creating a particular campaign for your goals allow you to keep a watch on the individual links shared on social networks like Facebook, Twitter, LinkedIn and some other social media channels. This is how you can track individual visits from particular shared links.

Measuring Social Media ROI 2. How to Measure Social Media Goals

Once you know your goals, the next step is to measure them as per your visitor’s action. The best way to measure your social media goals is through Google Analytics. Read on to know how it is done:

From Google Analytics dashboard and through Acquisition, go to Social Conversions

In case you don’t yet have your goals set up, you will be asked to create one.

Click on “Set up Goals”

google analytics goal wizard

Create a goal as per your requirements following the steps you are guided with. You must add the original URL destination for this which requires increased conversion. You must ensure the web page is not indexed by Google. This way, anyone who wants to land on it will have to go through the email process.

Following this, you need to attach a value to your conversions by:

  • Multiplying lifetime value with conversion rate: Measure the lifetime value of visitors and multiply it by the observed conversion rate (the average number of subscriber who turned into customers) to know the potential value of individual visits.
  • Your average sale: In case your campaign has a goal to get sales, you must measure your average sale and consider it as your value.

Finally, you will get to see your conversion details and revenue on a page like this:

social media conversions

3. How to Measure your social media Investment:

To know whether the ROI achieved from your social media campaigns is positive or negative, you need to measure the total amount invested. For measuring your social media performance this way, you should calculate:

  • Man-hours: Time investment is always important and you must ensure you measure the man-hours based on individual projects and not the annual salary of an employee. It is applicable on all cases, whether you are a social media team or a solo-pruner.
  • Social Media tools: You should measure the investment in social media tools used for your campaign. Keep this process similar to man-hours calculation and calculate the investment in the particular software for an individual campaign.
  • Content: Have you got your web page written by a copywriter or content writer? This is something which is easily overlooked, but you shouldn’t while measuring social media ROI.
  • Ad costs: If you have initiated promotion on Twitter or Facebook through specific ad campaigns, calculate it into the total cost.

As soon as you are done with the calculation of total expenses, you can easily measure your social media ROI using a simple formula:

(Total Earnings – Costs)  X 100/Costs

Your earnings is the value calculated and the costs are the amount you get after measuring your expenses.  Using the same formula, you can measure the cost spent for each social channel and the returns you get from each of them. This way, you can know which campaigns bring you positive ROI and which are the ones with negative returns. For the negative sources, you can make improvements by reducing your investment or by creating more effective campaigns.


Hopefully, now you know the right way of measuring social media ROI for your business. You must ensure you set right goals, measure the total expenses and figure out the profit and loss of your business.

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David Pascal

My name is David Pascal, and I’m a Software Engineer and an SEO Blogger. I have 4+ years of experience working with software firms. I spend most of my time on designing and technologies. I have played with some of the new technologies out there and have had a strong experience in them. More to it, I have a good sense of humor and I enjoy meeting new people.

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    April 18, 2017

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    • mm

      David Pascal

      April 18, 2017

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