Digital MarketingSocial Media

How to Calculate Social Media ROI

Now that we’ve established the business case for developing and maintaining a strong social media program, let’s answer, head-on, one of the myths you’ll hear often, maybe even from your boss. The biggest complaint made about social media marketing is that its impact, the return on investment (ROI), is unquantifiable. In a study by Econsultancy and Adobe, 2 a mere 12% of companies reported that they could track the impact of social media on revenues or the bottom line. Fully 57% of companies could report metrics no deeper than engagement, such as the number of followers, comments, and time spent on social pages.

Audience response

Track everything that’s trackable. As a digital medium, social is more easily quantified than you may think. Your website analytics, and the metrics provided by social networks, can measure impressions, interactions, visits, app downloads, event RSVPs, e-mail signups and other leads, coupon downloads, refer-a-friends, fundraising or sales—whether produced organically or through social media advertising. In your customer database, identify leads and prospects as having originated from social media. When they convert, allocate some of the sale to the social channel, along with directly tracked campaign and referral sales, for a valid ROI calculation

Impression valuation

PR managers have long calculated the value of “earned media” impressions, or the impressions if a free media mention had been bought as a paid ad. While it’s a fuzzier and usually much bigger number than audience response, this ad value of impressions is a decent, established precedent for social media managers to use as well. Your impressions in social media include your own posts, consumer “likes” and comments, reviews and ratings, YouTube video views, and more. Sum up all these social media impressions, divide by 1,000, then multiply by a typical banner advertising cost-per-thousand, or CPM (usually around $10). This provides an easy ballpark measure of the reach and positive impact of your social media program

Attitude & usage

If you can afford to commission them, “attitude & usage” (or A&U) consumer research surveys are a great way to track the evolving visibility and reputation of your brand and how it’s being affected by all your efforts, including social media. You can also track social brand mentions, customer-generated product ratings and reviews, and other signals of brand equity. While this is not strictly an ROI calculation, showing a correlation between social media impressions and positive brand image is an entirely valid exercise. Improved brand equity always means improved business performance.

The Other ROI: Risk of Ignoring

Perhaps most importantly, if your organization isn’t maintaining an active presence on social media, you’re ceding valuable territory to your competitors. By being absent from the conversation, you create the impression you’re irrelevant, unhip, even backward. From a practical perspective, if you’re not learning by trial and error today, you can’t be successful in social media tomorrow. An important aspect of corporate social media programs at this stage is learning from experience, building skills, and establishing core competencies in what is still very much an emerging field.


Social media offer an affordable, fast, and high-impact way to promote your business, bolster your brand image, and strengthen ties to your most ardent customers. True, it remains challenging to make ironclad return on investment calculations for the social channel. For one thing, the social media environment is still geared more toward entertainment, interaction, and personal connection than toward immediate commercial transactions. Therefore, you’ll have to place some faith in less tangible signs of business benefit: exponentially increased reach to prospective customers, improved access to existing customers, and the potential for greater agility in detecting and resolving customer service issues. These are the levers that drive tangible business results: e-mail signups and other leads, increased lifetime value of loyal customers, the influence of positive brand messages, and product ratings and reviews. The ROI is one degree removed, but it is real and growing.

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