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Social Media ROI: What Is It And How To Measure Its Effectiveness

Updated: Apr 27, 2023

A huge part of marketing in today’s business world looks slightly different than in previous decades. With social media being a main source of marketing and advertising, being able to track your social media ROI (Return on Investment) has become increasingly important.

But how do businesses do this? What holds “value” in these virtual communities and how do you showcase that for shareholders and the public? Don’t worry, Elemental Plans has you covered! Bringing you all things relevant in social media marketing, we help you stay informed and up to date. Sign up for our newsletter to keep you in the loop!

What is social media ROI?

Looking at the latter part of the phrase, ROI, which stands for Return on Investment, shows the value a company brings to the table. Social media ROI is how much value the company’s social media presence brings to the company.

The formula to calculate social media ROI is:

(Return-investment made) / investment made X 100

If the number calculated is more than 0, your social media efforts are making you money. If your number is negative, you’ve unfortunately lost money in your efforts to gain traction in social media.

Social media ROI is important in showcasing your value, but it is also a great tool for marketers to utilize when planning. They can determine what did and didn’t work and how well campaigns went with their target audience. Marketers can build from that information to create better-performing campaigns in the future.

What metrics do you use to calculate social media ROI?

The first question companies need to ask themselves when looking at measuring ROI is their overall objectives for the organization. Newer companies may be focused more on brand awareness and getting seen. Other companies put emphasis on click-through rates and lead generation. Relate your company objectives back to the ROI metrics you want to focus on to really express the company’s value.

There are multiple metrics to choose from when dealing with social media and we’ve already listed a few above but we will give you a short list of common metrics used at other companies:

1. Conversions

Using UTM parameters, which are just short pieces of code you can embed into links, you are able to track the number of conversions on certain campaigns or even certain platforms. This way, you can monitor how well each campaign or platform performs with regard to sales made. If you require assistance in implementing this strategy, don't hesitate to contact us.

2. Reach

Reach means exactly what it sounds like. How far did your content reach? Meaning, how many people saw it? This can be a trickier metric to track and not as reliable as other metrics to show successful ROI, but it’s still important to track.

3. Engagement

This is probably the most used metric in social media ROI tracking. This is seen as the most valuable as well because it showcases the interactions of the public with your content. Engagement includes several things like shares, likes, clicks, and mentions. This is one of the best ways to showcase social media value and how beneficial it is for the company.

How to measure ROI with social media

So now that we understand WHAT social media ROI is and what metrics to use, how do we use those metrics to calculate your social media ROI? We’ve condensed it down to four steps you should follow:

1. Calculate investments made.

This step includes combining all costs associated with the running of your social media. These costs could look like software costs, overall media budget, outside agencies, costs of the social media marketing team, and even the creation of the content being promoted, whether that’s in-house or externally sourced.

2. Determine and define goals.

As we mentioned before, the first question that needs to be answered is what are we measuring and why? Companies need to determine what goals and objectives align with their overall business goals and objectives so that they are better able to measure social media value. Focus on what creates the most value for your company and track those metrics.

3. Track metrics

This is exactly what it says. You then need to track the metrics you’ve chosen to go with. You can track your metrics with several software, one of the most popular being Google Analytics.

4. Report findings

The last step is to condense everything from the last three steps into a report. Make sure the report is free of jargon or terms that someone outside of the marketing world wouldn’t understand. This report is for stakeholders to determine how much value your social media brings to your company.

Overall, social media ROI has become a staple for most companies to showcase value in the social media world. It’s important for stakeholders to understand not only the value of the company itself, but its online presence as well. If you need help tracking your social media ROIs or want help determining what to track, get in touch with us! We are here to aid those that need it!


Digital Marketing Institute, “How to Measure Social Media ROI”, Clodagh O’Brien, May 20, 2022,, Accessed April 10, 2023

Hootsuite, “How to Prove and Improve Your Social Media ROI (Free Calculator)”, Christina Newberry, January 4, 2022,, Accessed April 10, 2023

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