How To Gauge Your Company’s Social Media Benefits and ROI

Given that 50% of the population worldwide uses social media channels such as Facebook and Twitter, there has been a corresponding rise in pragmatic advertising methods such as social media marketing. Many people believed that the issue of wastage would be resolved if social media ROI was taken into account. However, for marketers, social media marketing is driven more by faith than by evidence. Nearly 73% of new-age marketers believe that using social media has given them a competitive edge.

The claims that they make are not in line with reality.

Despite many businesses putting in a lot of effort to deliver great assistance via social media, only a small percentage of customers agree that this is the case. This lack of alignment between businesses and customers is likely due to businesses struggling to measure the impact of their social media efforts on sales.

Despite the amount of data that is constantly changing, how can we measure the impact of social media?

You may be wondering how to assess the cost of social media efforts and how these efforts translate into benefits such as sales. Keep in mind that social media efforts can impact your product perception and add to brand equity. Fortunately, there are ways to measure your social media efforts.

If you’re thinking about things that occupy your mind, you’re in the right place. So, let’s quickly start with it:

What is Social Media ROI?

If you want to know how effective your social media campaigns are for your business, social media ROI can help you track and measure your progress.

ROI is “Return on Investment”. It all depends on the objective of your social media campaign, which could be increasing online visibility, generating profit, delivering a better user experience, and many more. Simply put, it is the comprehensive set of social media activities in terms of money, awareness, reach, engagement, and so on that reveal your social media dominance.

Social Media ROI% Calculation

The ROI of social media is determined by how much revenue or investment is put in compared to other resources.

in revenue. If you invest $1,000 and make a $2,000 sale through social media, you’ve made $1,000 in revenue.

Based on the above formula, you will calculate the percentage as:

This means that for every dollar you invest, you can expect to get a return of one hundred percent.

However, you can calculate your ROI in engagement, reach, customer loyalty, reach, and leads rather than always in the form of profit.

Why Measure Social Media ROI?

As businesses compete for audiences’ attention on social media, 37% of buyers say that social media channels are their go-to source for purchase inspiration.

As a result of businesses putting more budget into social media campaigns, they are starting to get more results. However, many businesses cannot quantify the ROI of their social media campaigns. To prove that social media campaigns are effective, businesses should calculate their social media ROI.

A report from MDG Advertising finds that around 28% of marketing firms have difficulty measuring the impact of social media campaigns, while 55% claim they can measure it approximately. Additionally, 17% of firms are able to quantify their social media ROI and provide accurate data.

When you analyze your social media ROI, it gives you a better understanding of the results of your social media approach. If your ROI is low, it will point out the inefficiencies in your social media strategy so you can make improvements.

This will help you determine the value you are delivering to your audience. If you get a high number of conversions, it indicates that your messaging is relevant and well-received.

Tracking Social Media ROI is the Key to Success

You can find out which social media marketing campaigns are the most successful. You can learn which social media channels are most beneficial to you. This can help you decide where you should invest more money and what you should stop doing.

Although you may be aware of the significance of working out your social media ROI, you might be wondering how to go about doing it. Let’s continue by looking at how to calculate it as a whole.

The Importance of Impressions

It is important to make a good impression on social media because if people do not see your content, you will not be able to improve your online presence. It relates to the complete set of goals followed by reach, engagement, leads, etc. Increased impressions will lead to:

  1. Improved brand awareness
  2. Increased number of sales
  3. Improved brand sentiments
  4. Improved connectivity with the audience and public relation

Most importantly, paid campaigns can help improve your community size and engagement by providing more impressions.


The next most important thing to focus on after making a good impression is reaching a large volume of people with your message. This is related to how far your social media messages spread. You need to find out how many people had the potential to see your message to gauge its intensity.


Engagement refers to the number of likes, shares, and comments you receive on the content you post on social media. It is much more than just the number of followers you have.

If your followers are not reacting to your posts, then posting your content is not beneficial for your organization.


The next important thing after engagement is gaining leads from your social media campaigns.

The way you present your business to the public can directly impact your revenue. If you are able to effectively communicate the value of your products or services, you are more likely to see an increase in sales. Conversely, if you are not able to effectively communicate the value of your products or services, your revenue may suffer.


To calculate your conversion rate, take the number of acquired customers and divide it by the number of leads. Conversion is the number of people who buy something after seeing your social media campaign. You can work out how much money your campaign has generated by dividing the number of acquired customers by the number of leads.

Customer Loyalty

An important goal for businesses is to increase customer loyalty. The number of followers a business has is an indication of its customers’ loyalty. Followers are customers who continue to purchase from a business and who stick with the brand on social media.

You need to work on delivering the best experience to your customers from the start if you want them to remain loyal.

Ways to Measure and Analyze Social Media ROI

There are a few different ways that you can measure the ROI, or return on investment, of a social media campaign to see how successful it is.

Change in Sales and/or Revenue

The most basic metric to consider when determining the effectiveness of your social media marketing is an increase in sales or revenue. Compare your current figures to those from before you started using social media marketing, accounting for other influencing factors such as other marketing campaigns. If you are a non-profit organization, another metric to consider is the number or size of donations.

Quantity of Fans and Followers

Some argue that this metric does not give much information, and to some extent they are right. Getting fans and followers is only the beginning of social media participation. Once you have them, you need to be able to create some sort of tangible benefit – whether you are trying to sell more products, recruit more employees, or reduce customer service calls. However, a large fan base can be a very significant component of determining social media ROI, as a larger audience means a broader reach and more opportunities to engage with customers.

Follower Engangement

The quality of a social media following can generally be measured by their participation. A social media following consisting of a large number of fans that don’t interact with posts very often may not be as valuable as a smaller following of fans who regularly like and comment on content. It is beneficial to aim for both quantity and quality.

The number of responses to your posts on social media reflects engagement and visibility by your community. Comments and replies on a post show that fans are interested and engaged with your content. A higher number of responses is a sign of effective communication.

Amplification Rate (Shares and Retweets) 

Your fans’ fans are more valuable to you than just your fans because they provide you with exposure to a much larger audience.

Number of Favorites, Likes, and Shares

The number of likes or retweets a post gets can give you insight into whether your content is resonating with your audience. If a post gets few to no likes, it’s probably a good indication that the content isn’t resonating. On the other hand, if a post gets a large number of likes or retweets, you’ll want to take note of what you did to succeed in getting this response. Fans approving your posts can have an additional benefit: when a user likes one of your posts, this action may show up in a friend’s activity feed, increasing your reach.

Number of Social Media Mentions

If people aren’t talking about your brand on social media, that could be a good thing—it means no one has anything bad to say. But it could also mean that no one is sharing anything positive, either. An increase in social media mentions can show that awareness of your brand is growing.

The sentiment of Social Media Mentions

We don’t agree with the idea that any publicity is good publicity. Quality is more important than quantity. A social media campaign should try to increase the positive reception of your brand and company. If your social media goals involve reputation or customer service, this is a major factor in your ROI.

Number of Mentions in News Media

Mentions in the news are still important, even though people consume news in different formats than in the past. A successful social media campaign can earn news coverage, which can influence the success of the campaign. News mentions can be a gauge of how often people are talking about a brand and its social media efforts.

Facebook Fan Loyalty

The number of Facebook fans that engage with your brand (by liking or commenting on your posts) compared to the number of inactive fans will determine how far your content is likely to travel.


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