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measuring RoI

Every post, reel, and social media campaign is expected to deliver some tangible returns – aka Social Media Return on Investment. In simple words, they measure the output of social media marketing against the investment. The result is expressed in percentage value where a positive number indicates profitability.

It is the best way to analyze the revenue generated, consumers reached, and engagement over some time and utilize the data to improve the overall performance by tweaking the strategies and making necessary changes. 

Why is measuring ROI important?

Step By Step Guide - Measuring ROI of Your IT Tools - VirtualMetric - Infrastructure Monitoring Blog

77% of businesses reach their customers using various social media platforms

Social media marketing is an integral component of marketing and brands need to constantly assess their performance in this dynamic digital space. Calculating the ROI periodically evaluates the brand performance and analyzes the extent of effectiveness of the current strategies. It also enables informed budget allocations and helps reinforce brand values.

Social media is not a stand-alone entity separate from the rest of the business, which means every post, caption, and story has to align with the broader objectives of the brand, social media ROI ensures this alignment and fosters consistency, accountability, and strategic alignment.

Steps to measure Social Media ROI?

How to Measure Social Media ROI | Sprout Social

While ‘sales generated’ can be an important component, not every ROI on social media is going to be monetary. Follow these simple tips to set goals and calculate your business’s social media ROI most effectively. 

Define the objectives of your Social Media Marketing

Social media enables a brand to reach more audiences, interact with them, and build a loyal consumer base. Determine which one of these objectives aligns with yours. Being clear about what you want your brand to achieve from social media presence can help assess the returns logically and comprehensively.

What are the parameters that align with your objectives?

Consider what parameters would reflect the objectives that align with your brand, how you expect the consumer to act upon seeing the posts, and how accurately can you measure this. Although likes and comments are important parameters, there’s more to social media – you can consider the conversion rate, signups, subscriptions, shares, and other engagements. 

Track your performance in terms of the set parameters

Consider each of the parameters that you have set and track the metrics. Evaluate these periodically. You can assess the rate of conversions, number of visits, or sales generated. Make sure the period is uniform – if you want to assess quarterly (once every three months), continue with that – for consistency and ease of analyzing. 

The Top 13 Social Media Metrics to Track - AgencyAnalytics

Google Analytics is an online tool that gauges consumer insights through relevant data. If you are not a fan of time-consuming calculations, this could be immensely helpful for your brand.

Assess the social media marketing expenses

Understanding the Social Media Metrics That Drive ROI - Social Industries | Managed Social Media Advertising

You have tracked your performance in terms of the different parameters that you set, it’s time to assess the expenses now. Calculate the total investment that you made – make sure to take every expense into account, however little that is. You will need to compare your performance against the total cost that you would calculate to see if you have made profits or incurred losses in the given quarter.

Calculate the ROI and present a report

[(Returns Generated – Social Media Costs) / Social Media Costs] X 100 = Social Media ROI

Take the values you calculated so far and insert them in this formula to get your Social Media ROI. A positive number indicates profit, and anything negative would mean you might need to revamp your strategies. Don’t worry if you’re not an expert, there are online ROI calculating tools available that make your job easy and save you time.

Create a cohesive and legible ROI report with all the relevant data. Use charts and graphs to make it more comprehensible. You can put short-term achievements or highlight a goal based on your priorities. The goal of this report is to summarize the output of your social media strategies in a way that is understandable by the concerned teams and is effective for future reference.

Which Social Media Metrics Should Your Small Business Track?
How to Maximize Your Social Media ROI

When you regularly assess your social media and conduct periodic audits, you will realize that it is quite possible for brands to not always meet the requirements or achieve the expected ROI levels. However, by following a few rules of thumb you can improve your Social Media ROI significantly.

Top 8 Strategies That Will Increase Your Social Media ROI

  • Update, Adapt, Repeat: You learn something new every day on Social Media. The social media landscape is ever-evolving, and brands need to keep up with everything new. As a business, you will constantly need to update your strategies and adapt to fresh trends to boost your relevance and resonate more with the audience.
  • Study the competitors: It’s always good to take a look at what the competitors are doing and how that’s been working out. Having an idea about the competition perfects your campaigns, and is quite useful in understanding the gaps in the market and leveling up your game.
  • Regular A/B tests: Testing different factors like CTAs, Link positionings, Hashtag usages, and Post formats through periodic A/B tests would reinforce your brand objectives and help you tweak the strategies accordingly. These provide valuable insights that you can optimize to maximize your ROI.

Social Media Marketing: Tips to Maximize ROI + [Infographic]| Statusbrew

A simple way to ensure improvement in measuring ROI is by staying consistent across platforms. You can both foster engagement and reliability and improve your reach – which are essential criteria to ensure a positive ROI. If you find calculations tedious and would like some expert assistance, Apostrophy Services might be the place you’re looking for.


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