Understanding and measuring social media ROI

Sara Martín
30 May, 2018
ROI (Return on investment) determines the success of a marketing campaign. If you don’t calculate ROI it is very difficult to verify whether a campaign was successful or not.

In the end, social media ROI is what a company receives in return for their time, money and resources invested in their marketing strategies.

ROI allows us to track the financial impact of ad campaigns. It is calculated based on the benefits generated from our investment and the money invested.

ROI Definition

Return of investment. This metric is used to discover if a marketing campaign or social media investment has been profitable or not

Why should we measure ROI? 

Plenty of companies invest a lot of time and money to get more visibility on social networks.

What’s the problem?

Lack of measurement. If they don’t track the return on investment, they won’t know if their social media strategy is working.

Besides, ROI helps you to:

  • Understand in which areas there is still room for improvement.
  • Observe which social networks generate more income.
  • Discover the actions that generate a bigger impact.

How to measure ROI 

Companies are looking for:

→ Increasing sales and visits through social networks ←

You can’t determine the performance of an ad by only looking at the number of impressions received or how many people watched it.

You must always consider KPIs for measuring ROI as these metrics track and quantify the performance of your investment in social networks.

ROI formula

This is the formula to calculate the return on investment for social networks and any financial plan.


How to measure social media ROI

Although you now know the formula to calculate ROI, this is not enough to fully understand the efficiency of your investment.

Next, you can check the essential steps that you should take to get the most out of this metric,

1. Metrics to measure ROI 

The main data that you should consider to understand the return on your investment is:

  • Reach: Number of people who get your content. The number of followers that you have on your social networks is very relevant for this metric.
  • Engagement: It gives you insights about the impact of your content on social networks.
  • Traffic: It tracks reference sources on your webpage and analyzes the traffic coming from social networks. It allows you to monitor the performance of your social media strategies and their impact.
  • Conversion rate: it’s the part of the traffic that turns into real sale opportunities. It’s important to know the conversion rate on the different social networks so you can use it for a comparative analysis.
  • Impressions: We can find out how many people see our content with this data.

2. How to monitor ROI

  1. Define your goals:
    First, you must establish your goals and how far you want to go so you’ll know when you reach your objectives.
  2. Analyze your KPIs:
    These indicators will tell you whether you are meeting your objectives or not. Depending on your set of goals you will monitor different KPIs.
  3. Use tools to monitor your social networks:
    Nowadays, there are plenty of tools that analyze metrics and can assist you in monitoring your social networks. One of them is Metricool, which provides very valuable data about your social networks.
  1. Analyze costs and calculate ROI:
    Analyze all the expenses incurred for your investment to make sure you really know all the money spent.
    Once you know the costs, consider the effort involved towards your social media strategy and calculate ROI.

Once you have monitored your networks and measured ROI, you can introduce improvements to your social media strategies.

Now it’s time to focus on your strategies and track their ROI. You will know if they have the success that you were looking for.

Visit our online dictionary and learn more marketing terms

Do you have any doubt? Drop us a line in the comments section and we’ll get back to you.

Sara Martín


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