Minuscule Guide to Social Media ROI

B2B guide for Twitter Lead Generation

A Guide to Measure Social Media ROI

The Social Media ROI concept is gigantic enough to baffle any user. So here we present a small guide to help you understand the concept and its application.

First understand What is Social Media ROI

ROI basically has its origin in Business Finance. In simple terms, ROI is used to calculate the money you earn in return on the money invested. Although it is a monetary value but investment is an inclusive term for all your time, effort as well as the resources you put into.

Talking in terms of social media marketing, tracking ROI might be tricky because, in a layman language this seems to be no-cost marketing. Money seems nowhere in the scene when we are talking about retweets or likes which make us feel an amazing return!

Hence, the key elements for tracking Social Media ROI would be:

  • Identifying your monetary investment in social media
  • Attaching monetary value to your social media goals
  • Measuring Social Media ROI

    Simple mathematics says, ROI = (return – investment) / investment

    Calculating your Return/Profit

    The term “return” means different to different marketers. Thus, be sure about what you want to achieve? What is your ultimate goal regarding social media and also the actions in order to meet them? Also, find out how much these actions are worth for you?

    Follow these steps:-

    Choose a goal

    There might be a number of possibilities for choosing a goal. A few of them may include:

      • Online Purchases
      • Newsletter signups
      • Number of clicks on a link in update
      • Increased followers

    2. Goal Tracking

    After selecting your goal, get set to track it. Many Google tools are available for your help. Web actions such as downloads, signups and sales can be tracked in Google Analytics by setting up goals and event tracking.

    Further, social media interactions like shares, likes and follows can be tracked in Buffer.

    3. Assigning Monetary Value

    Here again we have several methods:-

      • Lifetime Value : Average earning from a customer

      • Lifetime Value * Conversion Rate : Worth of each potential visit

      • Average Sale : Average purchase through site

      • PPC costs : Probable amount of expenditure if ads were used to achieve the same social media actions

    The last method basically compares the amount you might pay in advertising for gaining a new follower or an impression and extrapolate for what you earned actually through organic means.

    Calculating your Investment

    The irony is that while participation on social media platforms is free, your time is not! Social media tools and ad spend really cost much.
    Your total investment is the total of the following:

      Your time

      Hourly Labor-cost multiplied by the number of hours committed over a given period (depending whether the measurement is weekly, monthly or per campaign)

      Your Social Media Tools

      Sum up the total cost of all the tools and services being dedicatedly used for social media

      Advertising Spend

      This amount would be the sum total of amount spent on promoting tweets, boosting Facebook posts and other such amounts.


    Every business wants a positive ROI. Its calculation is not an ordeal of fire. Just follow a few simple steps and it’s done!
    Figure out your major goal and track it. Think about both the current as well as new customers while taking any decision. Assign monetary value for the ease of assessment. Finally, calculate your investment and eventually ROI.

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