3 Steps To Measuring Your Company’s Social Media ROI

While measuring social media ROI can be tricky, especially since each company has different goals in mind with their campaigns, here are three key metrics every business should consider when attempting to add up their social media ROI.

3 Steps To Measuring Your Company’s Social Media ROI


Virtually every business today acknowledges how important social media is to branding–and also how difficult it is to measure its actual ROI. They know the social sites provide some measure of marketing firepower, but they don’t necessarily understand how to quantify its effectiveness. As a recent white paper from the Adobe company states, “Despite how pervasive social media has become, it isn’t being recognized for driving website traffic, engagement and revenue like it should be.”

Adobe, in this same white paper, cites a 2011 social media survey it conducted of 750 marketing professionals. Although 73% of those surveyed said they used social media for campaigns in 2011, only 15% said they intended to do so in 2012. Maybe that’s because 88% didn’t feel they could accurately measure the effectiveness of those campaigns, with 52% citing problems with determining a true ROI as their biggest frustration.   

And yet…according to a CMO survey in March of 2012, social media spending by business is reaching new highs. As a matter of fact, in the next five years, marketers said they expect to spend almost 20% of their total budgets on social media. That’s triple the current level.  

It’s easy to reconcile these two opposing lines of thought; much like a child dislikes the taste of medicine, but takes it because he knows he has to, the business world knows it has to deal with the power of social media, whether it wants to or not. The truth is that social media has become much too powerful to ignore, with 900 million users on Facebook, 100 million on Twitter, and LinkedIn approaching 120 million–and then there’s the Rookie of the Year, Pinterest, which became one of the top ten social media sites in less than a year.  

While measuring social media ROI can be tricky, especially since each company has different goals in mind with their campaigns, here are three key metrics every business should consider when attempting to add up their social media ROI:

1. Sales Conversions


How many sales are you getting from customers who had earlier clicked on social media links or visited your “fan page?” And don’t discount those visits if they happened weeks or even months before an actual purchase was made. In the early days of e-commerce, whatever site last provided the link that took the consumer to the actual online purchase got the credit; but today’s online buying process is a lot more complex. A consumer might first click on a Facebook link to check out a product. That buyer might then check out other products, then finally decide to buy the initial product and use a Google search to find the exact site again. Should Google get the credit then?  Most web analysts say no–that it was the first Facebook link that provided the info that actually caused the consumer to make the buying decision.  

2. Value of Increased Traffic

As just noted, links from social media can drive traffic to your site; that in itself is worth something even if the visitor has yet to buy from you. If you utilize pay-per-click strategies to drive traffic, look at the average cost of those PPC campaigns per person then analyze that cost against how many visitors you get from free social media placements. You can then put a dollar sign on the traffic you derive from Facebook pages, Twitter links and the like.

3. Depth of Engagement

Tourism Ireland has leveraged its social media activity to the max, to the point where they have the third-largest following of all national tourist boards on Facebook. Part of their success is they developed a formula to measure the value of the deeper engagements with their brand that only social media can facilitate, breaking that engagement down into four different aspects:

  1. Post Impressions – Views of brand posts on a social media site
  2. Page Impressions – Views of a brand’s page on a social media site
  3. Personal Action – Clicks on a photo, video or link to sample the brand more deeply
  4. Public Action – Commenting or sharing information on the brand with other social media “friends” or “followers”

When you can assign values to these different engagement components as Tourism Ireland did, you once again can place a specific value on your social media activity.


Again, you should choose the specific metrics you want to employ based on your marketing goals. The above three suggestions, however, will help you go beyond relying on the number of “Likes” your brand gets, to the number of dollars social media is adding to your bank account.

[Image: Flickr user Matteo Parrini]


About the author

John Souza is the founder and chief strategist of Social Media Magic and Social Media Marketing University. Under his leadership, the company has provided training courses and done-for-you solutions to customers across the globe, and has quickly become a trusted authority in social media.