How to Measure the ROI of Your Social Media Marketing

Social media has taken over our lives. Not only do we spend a whopping 116 minutes per day using social media, but these platforms have become the go-to place for companies to reach new customers and engage their current ones.

This is why any company interested in growing their brand is going to be equally as interested in cultivating a strong social media presence.

Social media marketing campaign

However, just like anything with your business, your social media efforts need to be purpose driven. “Everyone else is doing it” is not reason enough for you to invest your employees’ valuable time and your company’s valuable resources in social media.

Generally speaking, the primary purpose of your social media strategy is to drive sales. But understanding how social media adds value to the company isn’t always as straightforward. You need to think a little bit more broadly about your objectives, and then you need to spend some time evaluating how well you’re doing at reaching those objectives.

To help you do this, consider the following about measuring the ROI of your social media marketing.

Social media ROI


Most people use social media marketing to drive traffic to their website. Facebook, Instagram, and Twitter are great places to showcase your products and entice people to want to know more. And in general, this works; social media is the top source of website traffic, beating out organic search and paid advertisement.

As a result, if this is your goal of your social media campaign is to boost traffic numbers, then the amount of clicks you generate is a great place to start measuring ROI. But to put these numbers into context, it’s important to know what it would cost you to get that traffic from somewhere else, and also how much this new traffic is contributing to the business.

For example, say you run a three-month social media campaign that costs $5,000, and from that campaign you boost website traffic by 5 percent. You can say your ROI is a 5 percent boost in traffic, but how much more revenue does a 5 percent traffic boost provide? To figure that out, we need to look at the next component of measuring social media ROI.


Measuring conversions is critical to understanding social media ROI. Essentially, conversions are the percentage of people who take the action your content encourages them to take. Generally speaking, this means making a purchase, but it can also mean signing up for a newsletter, pressing “Like,” sharing, retweeting, etc.

Unfortunately, despite its effectiveness in generating traffic, social media tends to convert at a rather low rate. Depending on the source you use, it’s somewhere between 0.71 percent and 1.08 percent. Obviously, you’ll want to try and beat this, but if your numbers are somewhere around 1 percent, know you’re in the middle of the pack.

Because of this, it’s probably not best to rely on social media to change your conversion rate. Instead, rely on it to drive traffic and get email subscribers, and then work to optimize your other conversion strategies so that you can make the most out of the additional traffic your social media presence generates.

Micro-influencer pop-art


Engagement is a tricky concept to monetize and also to define. We understand engagement to be people’s connection with and willingness to communicate with a brand. A company with an engaged audience will post a piece of content and watch as people comment on it and share it with their friends.

You can use engagement to measure ROI, but to do this, you will probably want to have a good idea of what engagement is worth to you, and this can take some time to figure out.

Ways of doing it include keeping track of customer lifetime value, or the amount of money one person spends with you over time. Correlate the amount of times you connect with them, or rather, how many times they connect with you, and see if there really is a connection between engagement and sales.

Typically, when people feel passionate and connected to a brand, they spend more with it. But there are anomalies, and you shouldn’t assume anything without hard data to back you up.

If you find this angle is worth pursuing, the next step is to figure out what type of engagement you want to drive. Do you want people sharing your content? Commenting on it? Liking it? Retweeting?

Once you figure out what’s most valuable to you, then measuring ROI is a matter of tracking how many people you get to do this and then attributing that growth in engagement to a growth in sales.

However, this is much easier said than done, so if you are just getting started with your company and still aren’t sure what an engaged community means to you, then it might be best to evaluate ROI in a different way.


Another way to measure ROI is to look at reach. This refers to the number of eyeballs that see your content. It’s useful for companies that are just starting out and looking to grow their audience.

Ways to measure reach include number of followers, impressions, which refers to the number of people who saw the page, and advertisement equivalency, which is calculated by figuring out how much you would have needed to spend to generate that same reach with paid content.

However, in the end, reach almost always ends up contributing to one of the other points we’ve discussed. After all, what good does it do you for your content to reach 1 million people if no one clicks on it?

It raises awareness, which can be valuable, but beyond that, it provides little tangible value to the business. You’d be better off focusing on other aspects of your campaign.

Social media marketing


Marketers have long struggled to measure the impact of their work. However, as the world goes online and more and more data is available to us, it’s easier than ever before to track our efforts and determine their impact on the business, and it’s something you should be doing on a near-constant basis.

About the Author: Kevin is the founder of Broadband Search, an online platform that helps people find the best value internet service provider in their area. But this is his second business, the first being Vast Bridges, a Jacksonville, Fla.-based lead generation and customer acquisition company. His experience has taught him a lot about starting and running a successful business, and he likes to share this with other entrepreneurs whenever he can.


Leave a Reply

Your email address will not be published. Required fields are marked *