What Is Social Media Marketing ROI?

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Nobody willingly throws money down the toilet, but if you’re not tracking your social media marketing ROI – you might be doing just that. Marketing is never completely devoid of forward movement, because though your social media campaign might not lead to a single sale – you might have introduced your brand to a bunch of future customers. This makes tracking ROI over time quite a challenge. Regardless, track it, we must, as this is one of the only ways to hold your marketers and the content they produce to account. So, what is social media marketing ROI, and how does one successfully measure it?

Returns On Investment

Like most returns on investment, social media marketing ROI refers to the number of resources recovered from investing resources into a social media marketing campaign. In a general sense, social media ROI measure all social media actions that create value, divided by the investment your brand made to achieve said value. The formula to figure social media marketing ROI is:

Value / investment (ad spend, people hours, etc.) X 100 = social media marketing ROI

Four Steps To Measuring Social ROI

  1. Establish Clear Objectives

    The first step to establishing without a doubt what your ROI is on social media activities is to establish what value it is giving your organisation. Clear objectives, like trying to make 10 sales via social media in a given month, help you figure out what the purpose is behind your social media efforts – and how much money you’re making back.

  2. Set Smart Campaign Goals

    Other than overall social media marketing goals, like wanting to grow the brand’s following by X people in a year, specific campaign goals can also be set to establish better true ROI. Goals that do not lead to increased revenue will make it difficult when figuring out ROI, as qualitative outcomes of campaigns (like new followers) might only lead to revenue in the future.


  3. Calculate Social Spend

    Let’s say, for argument’s sake, that your last social media campaign led to the securing of a contract for your brand worth R5000. That is your value. The next step is to see how much you spent on making that R5000. In other words, what steps were taken to influence the customer into doing business with you, and how much money did you have to spend?

  4. Prepare ROI Report

    If you’re the business owner, then chances are the only person who will be required to see a report on the social media marketing ROI is you – which negates the need for a report entirely. However, should you be answering to someone, draw up a visual ROI report explaining in simple terms what was done, what was achieved, how much it cost, and how much profit (if any) was made?

Any business owner wants to see a return on any investments they make, including investments into social media marketing.

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