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If you have a business, chances are you use some form of social media to promote it. How do you know whether your social media efforts are working?

If nothing else, the visibility and connectivity offered by social media has convinced most business owners that it’s worth their while. Tracking your social media ROI – or return on investment – lets you know if the time and money spent on your social media strategy is reaping the results you desire.

Social media alters the playing field. If business content gains traction and is shared many times across various social networks, then the business awareness and exposure will have significantly increased. But this never translates immediately into sales.

So establishing true social media ROI is not straightforward.

Therefore, when a business owner or social media manager requires a reliable way of measuring and reporting on social media performance, there must be an understanding to what marketing metrics determine goal completions.

Here is a quick overview of matching marketing metrics to business goals to establish the social media campaign performance.

Business Goal Marketing Metrics
Brand Awareness Reach, Social Sharing
Brand Loyalty Return Visits, Repeat Engagement
Customer Engagement Comments, Bounce Rate
Traffic Generation Referral Visitors, Time on Site
Lead Generation Submissions, Opt-ins


Measuring Social Media ROI

How much time, effort and investment has social media consumed and has it created business value?

While it may be easy for the average small business to think it’s worthwhile being active on social media, most would agree it can be a drain on resources if not managed effectively. The only way to know whether it’s adding value to your business is to measure the social media ROI.

That’s not to say measuring social media ROI is easy. Recent studies show that 88% of 750 surveyed marketing professionals didn’t feel they could accurately measure the effectiveness of their social media campaigns. 52% said that dealing with social media ROI was their biggest frustration.

So if the professionals find it hard, then no doubt others will too.

How do you measure the return on investment for social media?

That’s a question I get asked often. So let’s break out the math…

Social Media ROI Formula

Social Media ROI Formula

Here’s a quick basic example:

Gains: £7,000 resource deflection + £12,000 funnel savings + £45,000 sales conversions

Costs: £30,000 people + £5,000 technology + £9,000 process implementation

Now let’s plug this into the above formula:

(£64k – £44k) / £44k x 100 = 45.5%

In this example, the business is demonstrating a positive social media ROI, by returning almost a half of their investment during the measured period.

Understanding what the gains and costs that are associated with social media is the tricky part. There can be many components of social media campaigns that are indirectly influenced, or effected by outside forces, rendering basic measurements unreliable.

An example of this is the amplification effect of social sharing – does this mean your reach extends, or merely stretches it’s arms temporarily?

Social Media ROI Infographics

Here are 3 interesting social media ROI infographics – let me know which is your favourite in the comments section at the bottom of the page.

Social Media ROI Infographic - 3 myths of ROI

Infographic by WOMMA

Social Media ROI Infographic - The Marketers Paradox

Infographic by odm grp

Social Media ROI Infographic - Ten Examples of Social Media ROI

Infographic by psoshul