Learn how to calculate your social media ROI — aka the return on investment from your social media activities and expenses.
Social media managers know the recurring nightmare of being pulled into a meeting with executives and asked to prove our social media ROI.
This scenario haunts us, and not because we don’t believe in the value of social. Proving a dollar-amount return on investment is a pretty complex process that involves some heavy data lifting.
Still, we know that social does make an impact. We’re not alone on this, either. 96% of marketers agree that social media delivers positive returns. And now, it’s time to prove it.
In this post, we’ll walk you through the steps to calculate and improve your social media ROI (including a list of our go-to tools). Nightmares, begone!
ROI stands for return on investment. For our purposes, social media ROI means the business value returned from social media marketing and advertising.
In other words, social media ROI measures the results of social media marketing compared to its costs. It’s a way to assess whether your social media strategy is generating a positive outcome for your financial or strategic goals.
But, social IS bringing returns.
Data from Statista forecasts social commerce to keep growing 30% year-over-year. Plus, they estimate sales via social channels to reach US$2.9 trillion by 2026.
So, what’s all the fuss about?
Understanding social media ROI is crucial for several reasons:
- It helps you determine where your time and money is best spent.
- You’ll know what works and what doesn’t, based on the metrics that really matter to your business.
- It helps you adapt to trends and market changes more quickly.
- You’ll be able to advocate for more investments into your social program, and feel justified doing so.
In essence, social media ROI matters because it bridges the gap between social media activities and business outcomes, proving how social marketing contributes meaningfully to the organization’s success.
And if you want to earn more budget and resources to scale up your social media strategy? You’ll need to communicate your results to key stakeholders and executives. If you want to hang onto your budget, you better be able to prove why you need it.
The exact ROI formula varies from business to business because measuring ROI depends on which objectives matter most to your company. These priorities might include brand awareness, revenue, or customer satisfaction.
Calculating social ROI using math
Here’s a simple formula to calculate social media ROI:
Social media ROI = ((Value generated from social media – Costs of social media investment) / Costs) * 100
Here’s what the components of the formula mean:
- Value generated from social media can include increased sales, leads, conversions, or cost savings due to effective social media engagement. We expand on this more below.
- Costs of social media investment includes all costs associated with executing your social media strategy. It can include advertising budgets, the cost of creating content, employee salaries, software & tool subscriptions, and other resources related to social media activities.
The result of the formula (a.k.a. your ROI) is usually expressed as a percentage.
Any ROI percentage greater than 0 means that your social media efforts are profitable, i.e. you have generated more value than the resources you invested.
In contrast, a negative ROI means you invested more than you made back (aka you lost money).
Practical examples for measuring social media ROI
Here are a few examples of how this social media ROI calculation might work IRL.
Example 1: E-commerce
An e-commerce business wants to measure the ROI of its latest social media campaign aimed at increasing sales. Here’s how they could do it:
- Value Generated: $50,000 in sales from social media referrals
- Costs: $10,000 on social ads, $5,000 on content creation, $3,000 on software subscriptions
- ROI Calculation: ((50,000 – 18,000) / 18,0000) * 100 = 178%
This means the campaign generated 178% more value than the resources invested.
Example 2: B2B
A B2B company focuses on lead generation through LinkedIn. They want to calculate the ROI of their efforts:
- Value Generated: 100 qualified leads, each valued at $200, totaling $20,000
- Costs: $2,000 ad spend on LinkedIn, $1,500 on content creation, $500 on analytics tools
- ROI Calculation: ((20,000 – 4,000) / 4,000) * 100 = 400%
This indicates a 400% return on their social media investment.
Measuring social ROI with Moyens I/O
Obviously, crunching data manually is time consuming. And, in this modern age, mostly unnecessary.
Use analytics to improve strategies
If you want to prove your social media ROI, you’ll need to know how your content is performing. And, if you want to know how your content is performing, you’ll need a robust social media analytics platform.
See what works for the competition
Tell a compelling story with reports
One of the best ways to sell your social media efforts to your stakeholders is through regular, in-depth reporting.
Track results beyond social
Social media ROI can come from anywhere, even outside of social media.
Link tracking and web attribution tools can also be helpful when tying social efforts directly to business outcomes. By associating unique post IDs with each social post, you can connect web conversion data—like completed goals or purchases—back to specific social activities.
Measuring social media ROI means measuring what you get back from the time and money you put into social media marketing. It helps you see which strategies are paying off and which ones might need adjusting.
Use this FREE social media ROI calculator to see where you land.
Using our ROI Calculator is simple:
- Enter your social media costs and results.
- Get instant insights into your ROI and what’s driving your success.
- Compare different campaigns to see which ones are delivering the best results for your business.
With the social media ROI calculator, you can:
- Prove the impact of your social media efforts in dollars and cents.
- Make smarter decisions based on clear data.
- Impress your team and stakeholders with tangible results.
Disclaimer: This tool provides estimates and is meant for informational purposes only. Results may vary based on your specific circumstances and goals.
Social media marketers often have mixed feelings about tracking ROI. On one hand, it’s the best way to show the value of our efforts, and prove to higher-ups that all these memes, reports, and influencer partnerships are actually worth it.
On the other hand, it can be hard to accurately attribute sales to specific posts or campaigns. Not to mention, single posts might not always move the needle, but your wider social media presence could. How do you track that?
Still, data shows that 55% of marketers believe that using social media improves sales. Not to mention, all those increased traffic, exposure, and lead gen benefits that can indirectly boost the bottom line. Clearly, the proof is in the pudding. So, why do we still feel so unsure?
“While awareness is important, social media can also drive leads and sales,” she explains. “Secondly, there’s the belief that going viral equals social ROI. However, virality doesn’t always translate to meaningful engagement with your target audience. It’s essential to focus on addressing audience pain points rather than chasing viral content.”
Eileen also notes that staying the course in an ever-shifting social landscape can be stressful. “Trends come and go, algorithms change… It can be a challenge to continuously prove how social is bringing in ROI as not every post is going to land with your audience..”
Setting clear goals is key. Whether aiming for brand awareness, customer engagement, or direct sales, defining your KPIs upfront gives you a roadmap to measure success. Eileen advises, “You don’t know what your ROI is until you’ve laid out the goals you are tracking towards.” In short, you can’t measure what you haven’t set.
Ready to tap the well of your social media marketing ROI? Here’s how to make posts make sales.
1. Test and optimize
“Social is a place where we are continuously testing new content, features, and learning what’s working/not working,” says Eileen Kwok. And she’s right.
Unlike other marketing channels, social media is a constantly changing landscape where testing and tweaking your approach is key to getting the most out of your efforts. It’s a place where you can try different types of content, features, and strategies to see what works best for your audience.
You can run A/B tests on social media to test different factors and optimize your content based on the outcomes. You can run experiments through organic social accounts and paid ad campaigns.
For example, we ran this experiment to test whether Instagram carousels perform better than Reels. After three weeks, we found carousels earned better engagement and reach!
Check out all our social media experiments here.
There are many factors you can test, including:
- Visual assets
- Post format/ad format
- Post copy
- Call to action
- Link placement
- Hashtags
- Target audience
Testing—and reviewing your social media analytics—helps you learn what types of content actually resonate with your followers. Based on those insights, you can scale up that content or ad and increase your social media advertising ROI.
2. Get inspired by competitors
One of the most tried and true rules in social media is: check out what your competitors are doing.
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3. Use UTM parameters
One of the easiest ways to track social media ROI is with Urchin Tracking Module (UTM) parameters. UTM parameters are tags you can add to the ends of your URLs that let you track exactly how much traffic a specific URL gets.
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So, if you have a URL on your LinkedIn post that directs users to your online store, you’ll be able to see exactly how many people went to your store from that post, and who actually bought from you.
Now that’s what we call measuring social media ROI.
4. Don’t discount your followers
We know, we know. Everyone says followers are a vanity metric—and vanity metrics don’t count.
But, the truth is, followers matter. At least in the way that without them, you don’t get engagement, and without engagement, you won’t get sales.
Take it from TIME’s Social Media Strategist Tameka Bazile, who says that:
- Follower count does determine trust and loyalty.
- 75% of people who follow brands on social have plans to purchase from them.
- 64% of consumers will buy or boycott a brand based on its position on a social issue.
Now tell us followers don’t affect your ROI.
5. Keep refining your goals
A wise marketer once said: a goal set is a goal set to forget. Or, something like that.
What we mean is, goals in social media marketing should be flexible, not set in stone. As Eileen Kwok points out, “The goals you have set for at the start of the year, could have already changed. Depending on the shifts your organization is making, or the changing social landscape, make sure you are revisiting your goals every quarter to see if any updates need to be made.”
Adjusting your goals as new information comes available helps you weed out the tactics that aren’t working, and pay more attention to the ones that are. The stronger your social media strategy, the stronger your results.