The ROI of Social Media

Social media campaigns need to be treated just like any traditional marketing campaign. Measuring the return on investment is the only way to know whether or not it is effective. Return on investment is more than just tracking how many followers a brand has gained. While follows, likes, and mentions are great, a ROI based on actual dollars is important to measure the usefulness of the campaign.

Social media ROI is no different than regular ROI, except that it may be more challenging to assign dollar values to some resources. Any resources used to execute the social media campaign are measured, then subtracted from the financial outcomes and calculated into a ratio (Tuten & Solomon, 2015).

Social media advertising takes up more time than before, so it is a cost for any company. Managers will expect social media marketers to provide a thorough return on investment analysis in order to prove that the campaign is worth making its ways into the budget.

While there are several ways to measure social media ROI, there is a general process to follow. Dag Holmboe describes a three-step process that includes defining a social media goal, defining a social media return, and defining how hard dollars will be tied to the return (2011). While sales may seem like the go-to way of measuring ROI, it can also be measured by customer insights, website traffic, or customer support.

For example, social media campaigns may be used to replace customer support calls, as they are cheaper and more efficient. A company can calculate how much a traditional call would cost them, verses how much it costs to conduct support on Twitter. The money saved is the return, and can be calculated as a ratio to the investment in those running the Twitter support team.

Social media is great because it has all the properties of traditional marketing, like building a positive brand image and driving customers to the brand, but add a level of engagement that brands cannot get elsewhere. However there are so many different levels of engagement, that brands must be precise in defining their objectives, and what metrics they use to measure their ROI. They must chose if they include early-stage engagements such as simply seeing, or rating a product, or want to only capture serious engagements such as purchases and recommendations.


Holmboe, D. (2011, October 12). How to Estimate Your Social Media Return on Investment. Retrieved from
Tuten, T. L., & Solomon, M. R. (2015). Social Media Marketing. Boston, MA: Pearson.

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