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In 5 Easy Steps Discover Your Social Media ROI

In 5 Easy Steps Discover Your Social Media ROI

You probably calculate ROI figures from time to time. It’s pretty easy to do when you’re calculating ROI on something like a direct-response advertisement. But what happens when you’re dealing with something like social media?

There’s the standby formula:

(revenue – expenses) / expenses = ROI

… but that doesn’t really work for social media. So let’s walk through the steps of determining your social media ROI…

Step 1: State Your Goals

The “return” on your investment may not translate into a direct monetary amount, which is why you need to first figure out your social media goals. These goals may include:

  • New followers
  • Engagement metrics (such as likes, shares and comments)
  • Clicking links to go to your website
  • Watching a video
  • Downloading a file (app, report, video, etc)
  • Joining your mailing list
  • Making a purchase

… and similar, measurable actions. In other words, be very specific about what you want so you can measure results.

Step 2: Assign a Dollar Figure to the Numbers

Next, you need to figure out how much these measurable goals are worth to you when someone takes a specific action.

Depending on your goals, you may be determining:

  • The lifetime value of a customer.
  • The value of a click.
  • The value of a subscriber.
  • The value of a visitor.

For example, let’s suppose that for every 100 people who watch a video you’ve posted on Facebook, two of them purchase a $100 product upfront. That means you make $200 for every 100 people who watch your video, so every viewer is worth $2 to you.

Make sense? Now you can go through and determine the value of various actions, such as people “liking” your Facebook page, sharing your content or joining your list.

Step 3: Track and Measure Your Goals

You’ll need to install tools so that you can measure your goals. Google Analytics or the alternative Piwik.org will help you with onsite analysis. For social media engagement, you may use a tool like Buffer.com.

Step 4: Figure Out Your Investment

If you use something like Facebook pay per click ads to figure out your investment, then the calculation is pretty easy. Just figure out how much each click costs to determine ROI.

Let’s go back to the example where each person who watches a video is worth $2 to you. If you spent 50 cents to get each viewer, then you’re getting a nice $1.50 return on your investment for each viewer.

The calculations get a little more complex if you’re dealing with other types of investments. Here’s what you need to calculate:

  • How much time you spend working on a social media campaign (and how much your time is worth per hour).
  • How much time your staff spends working on a social media campaign (and how much their time is worth per hour).
  • What you’re investing to outsource your social media.
  • What you’re investing in paid advertising (such as pay per click marketing) to bolster your social media campaign.

Step 5: Run the Numbers

Now you know your expenses and your return, so you can crunch the numbers to determine your ROI. Let me give you a really simplified example…

Let’s suppose you’ve outsourced your social media marketing to an experienced team, as you’ve determined that’s more cost effective than having your in-house staff do it. And let’s suppose the team put forth a campaign that costs $3000. That’s your total investment.

Now let’s suppose your main goal is getting new leads, and you’ve determined that every lead who fills out a request form is worth an average of $1000 to you.

So imagine your social media team creates a social media campaign that generates 400 new followers to your Facebook page. Four of those new followers go on to fill out your request form, which is worth $1000 each ($4000 total).

Your total revenue for this campaign = $4000.

Your total expense = $3000

That means you made $1000, which is a 33% return on your investment.

Of course that’s just an example – your mileage will vary depending on your business, investment, prices, and returns.


Social media can provide some tangible returns in terms of new subscribers, new customers, and new sales. But it can also provide a lot of less-direct benefits, such as word-of-mouth marketing and brand building. Both of these facets are important, and it’s a good idea to estimate your ROI on all of these components as near as you can.

One thing you’re likely to find is that you can boost you ROI by outsourcing your social media strategy and implementation to an experienced team who knows how to get great results in the most cost-effective way. You don’t have to look far to find this sort of team – just get in touch with the social media experts at HireAWiz


Request a quote and a Specialist will reach out to discuss your need.

or call (623) 521-1418