If the concept of social media ROI feels rather enormous, you’re not alone. There is an vast breadth of the topic. Why? This is new territory that continues to evolve and grow with users. One thing we do know is measuring the return on your social media investment is no longer optional.

ROI has its roots in business finance. Businesses use ROI to calculate the dollars-and-cents return on a dollars-and-cents investment. No business wants to put money and resources into something that doesn’t pay off.

Social media ROI is what you get back from all the time, effort, and resources you commit to social. And it’s best calculated with dollar amounts.

Social media ROI = (SM return – SM investment) / SM investment percent.

Of course, there are no dollar signs dangling from re-tweets or likes. Twitter, Facebook, and others are no-cost marketing channels to join, potentially a zero-dollar investment (which makes any return exponentially fantastic). But considering the switch from the initial inception of each network’s organic reach to a pay-for-play platform; gone are the days free social. Organic reach has almost completed dissipated for business pages, even though relevancy is more important than ever. As social real estate gets more and more competitive, even those that follow you may not see your content. Unless of course, you pay.


McKinsey recently surveyed 20,000 consumers and found that social recommendations are behind more than a quarter of all purchases made. This is well above the 10%-15% estimated in earlier research. And in the majority of cases, these social updates have a direct impact on buying decisions. To shun Facebook and other networks altogether is to ignore the more than 2 billion users around the globe who rely on social media for news and updates.


So first things first: What do you want to achieve? What is your overarching goal with social media? And how can you specify the right actions that meet this goal?

Then, how much are these actions worth to you?

1.      Choose a goal

2.      Track your goal

3.      Assign a monetary value

4.      Measure, analyze results & improve

Once that is in place, track that amount in your analytical reporting and make calculated improvements to build on your progress. Social media ROI is doable with a bit of critical thinking and detailed planning.


Goal No. 1: Increase social media engagement

Social media metrics to measure: Likes, Shares, Comments, Retweets, Mentions, Favorites

Goal No. 2: Increase customer acquisition on your website

Social media metrics to measure: URL clicks and traffic from social media

Goal No. 3: Increase brand awareness

Social media metrics to measure: Follower growth rate, percentage change over time in followers, Twitter sentiment, reach by region, clicks by region