How to Measure ROI in Social Media Marketing

How to Measure ROI in Social Media Marketing

by Swarada Chitale January 29, 2020

Social Media Marketing has taken the world by storm. Every time you scroll through your Facebook or Insta feed, there is something offbeat waiting to grab your attentiosn and coax you into hitting the Like button.

Since social media is incredibly influential and persuasive, it is only natural to wonder if you should actively invest in paid marketing campaigns for your pages. The answer is a definite yes.

However, to understand what kind of campaign you should run and how effective it will be, you need to measure your ROI for social media campaigns.


What is Return On Investment (ROI) ?

Return on Investment (ROI) in social media marketing refers to the profit or loss your business is likely to make in a social media marketing campaign. It is dependent on the amount you have invested in the said campaign as well as the goal of the campaign.

How to Measure ROI in Social Media Marketing

How to Measure ROI in Social Media Marketing | Brand You Digital

Source : freepik

A lot of people pay heavily to make their posts go ‘viral’, without first understanding virality. ROI helps you keep a precise track of the returns you expect, whether it is in the form of increase in social media followers or generating leads for your business.

Marketing on any social media platform does not have a physical presence like handouts or billboards, but it is impactful nonetheless. Spending money on social media marketing might seem like grasping at straws, and might actually end up costing you unnecessarily if you don’t choose the right type of campaign.

But if you really want to know how the money you invest in these campaigns is going to be used effectively, you need to measure ROI for social media marketing.

It is a five-step process and at the end of it, you are going to have a new understanding of how useful measuring ROI is. Here goes.

5-Step Process for Measuring ROI for Social Media Marketing

Step 1 : Set smart, actionable goals

Setting a clear end goal for your campaign is necessary. Not all brands are marketing to sell things. So, while money can be a goal for some brands, awareness generation or thought leadership can be the goals for others.

Having said that, there are essentially two types of campaigns – Brand Awareness and Lead Generation. The former focuses on brand expansion and building the overall image of the brand in the consumers; the latter focuses on stimulating and capturing the interests of potential consumers.

It is important to choose between either of the two main campaigns as a basis to set your ROI goals.

Metrics like shares, followers, likes are of course important but shouldn’t be the only goals. Focus on increasing organic traffic like meaningful interactions with consumers, subscribers, number of downloads.


Step 2 : Decide Key Performance Indicators

KPIs are the quantifiable measurements used to measure your brand’s or company’s performance relative to a goal, like increasing sales, brand awareness, or improving customer service.

To decide the Key Performance Indicators, it is first necessary to know in-depth about the current company performance. If you know the mistakes and shortcomings, then there is definite room for improvement.

There is no proper step-by-step process to set the right KPI. It is more of an evolving process, and there are a few important things to consider.

  • Focus on a few key metrics

As all of us have heard, less is more; especially while choosing KPIs. While there are metrics by the dozen that you would like to focus on, it is more convenient to track only a few chosen metrics, between four to ten.

  • Consider the brand growth

The emphasis on certain types of metrics will see a shift depending on what stage your brand is at. If you are a well-established brand, you should focus on metrics like customer lifetime value, whereas if you are a relatively new brand, you need to focus on metrics that deal with business model validation.

  • Understand KPIs completely

It is important to understand that KPIs vary with every business, brand, and industry. The KPIs you chose will be focused on and influenced by your brand model. Ensure that KPIs accurately measure your progress towards your goals and how relevant they are to your brand.


Step 3 : Measure your goals

Now that you have set out goals and laid out plans, the next step is to measure and track them. You can measure your goals using web analytics services like Google Analytics or Yahoo Analytics. Social media platforms like Facebook and Instagram feature the ‘Insights’ option as an inbuilt data tracking and analytics tool.

In addition to knowing about which channel is bringing in the most traffic, you also get the details of ROI for a specific campaign. This will help you keep track of your progress towards your goals.


Step 4 : Track all expenses

At the end of a social media marketing campaign, you need to figure out if you have a positive or negative ROI. For that, you need to calculate other factors you spent in addition to money, such as:

  • Time

Time is money, and it is of equal importance to be considered while calculating all the ROI. Add up all the hours spent on each campaign over a specific period of time. This gives you an idea of whether the time has been used qualitatively or not.

  • Content generation and marketing

If you created the content and copywriting material by yourself, add up the effort. In case you have outsourced content, it obviously required finances. Include these minor expenses in the overall budget as well.

  • Paid Marketing expenses

Ads and promotions on Facebook, Instagram, and Twitter are to be included in the cost. Add these expenses to the overall budget of the campaign because these are the most expensive running campaigns.

  • External Resources

During the course of the marketing campaign, a lot of external resources are used to aid the process. Using paid social media tools or hiring a digital marketing company for your work is an example of such resources being used. Even if it is external, it is of significance to be included in the tracking of expenses.


Step 5 : The Final Calculation

Your final calculations determine if your ROI is positive or negative, which results in your marketing campaign being profitable or not. Factor in all the expenses during the final calculations, no matter how insignificant.

Use this simple formula:

ROI = (Earnings – Cost) x100/Costs

Your earnings are what you get out of the campaign and the cost is the sum total of all the expenses.

If the ROI is positive, it is easy to run a similar successful social media marketing campaign. On the other hand, if your ROI is negative, a few tweaks and adjustments in your planning can help you turn the campaign into a profitable one.

The Last Word

In the end, running a successful social media marketing campaign depends on the positivity of the ROI during the final calculations. Your social ROI boils down to metrics. Hence, it is important to understand the brand performance and track your goals.

Do you have any additional ways and means to measure social media marketing ROI?

Let us know in the comments section below!



Know More Information About Internet Marketing Agency in Thane, Mumbai Contact Brand You Digital – Best Social Media Marketing Agency in Thane, On +91 98229 10844 Or Email Us At


Social Shares
Subscribe To Newsletter
Be the first to get latest updates and exclusive content straight to your email inbox.
Stay Updated
Give it a try, you can unsubscribe anytime.