Expert Tips on How to Measure Social Media Marketing ROI
by Julie Weishaar
December 26, 2023
social media marketing ROI

As a marketer, you may not be aware that you are turning $100 to $1000 until you start tracking your social media marketing (SMM) return on investment (ROI).

Measuring your return on investment (ROI) will help you decide whether to stick to your current social media campaign or make an improvement.

Good social media marketing should bring a positive ROI, while a bad one reverses the case.

Sadly, not everyone knows how to measure social media marketing ROI, so we will share some expert tips in this post.

What Is Social Media Marketing ROI?

ROI is an acronym for Return on Investment, a metric used to measure the probability of making a profit from an investment or checking if the past investment was profitable.

Social Media Marketing ROI means calculating the returns of all social media expenses and activities.

The formula for SMM ROI is = (total value achieved – total investment made) / total investment made.

Your investment is profitable if your answer using the above formula exceeds 0. If less than 0, then you have run into a loss.

The ROI value will let you know if you need to review and refine your social media marketing strategy.

It also helps you determine the most important parts to focus on when marketing.

 

How To Measure Social Media Marketing ROI

How To Measure Social Media Marketing ROI

Measuring social media marketing ROI can be trickier than you may think because of several metrics to consider.

If you are not careful enough, you may get the wrong value for your ROI.

To avoid this, we will be sharing some expert tips on measuring your return on investment below;

Calculate The Total Expenses

This is the most obvious and essential factor to consider when measuring your social media marketing ROI. The total amount you spent should cover the following;

  • Your campaign dashboard history can easily track the Amount spent on ads.
  • Cost of content created on all social platforms, including the amount paid to writers, editors, video creators, and freelancers. You can get enough data from invoices received and payroll.
  • The total amount spent on acquiring and maintaining social platform tools is important only when you spend money purchasing or subscribing to some premium tools or programs.
  • Agencies that you used their service, if there are any.

The total expenses sum up to give the Social Media Marketing ROI Formula investment value.

Identify Your Goals With The Social Media Marketing

You decided to include social media marketing in your marketing campaign for some reasons.

Identifying your goal becomes easier if you can figure out these reasons.

Having a clear picture of your business objective will help you know if your investment helped you achieve those goals.

You might get the wrong SMM ROI value if you don’t consider your business objectives. So, check out some of the Social Media Marketing goals below:

  • Brand Awareness – Making your business reach a new and broader audience should be prioritized during social media marketing.
  • Business Conversions like converting your visitors to email subscribers, visitors to buyers, email subscribers to buyers, and other forms of conversions that align with your marketing goals.
  • Customer Experience – Keep your customer experience in mind when promoting your business on Social media. You should be willing to increase your social media engagement rate and build customer trust.

There are many other reasons you started social media marketing. Highlighting them and ensuring that your ROI measurement focuses on those goals is essential.

Identifying these goals makes it easier to know the metrics to track when measuring ROI.

Track Metrics That Align With Your Goals

This step becomes easier if you have done the previous step correctly. Tracking these metrics should tell you if your social marketing goals are achieved.

It will help you calculate your returns from an investment. In the same way, calculating expenses is necessary to measure your Social Media Marketing ROI.

So, check out some social media metrics common to all social media marketers.

  • Revenue generated – Calculate the total income generated from social media marketing.
  • Calculate the value of other metrics that lead to sales, like sign-ups and conversions, reach, website traffic, lead generation, and audience engagement.

The value for these metrics sums up to become the value for the total value achieved in the Social Media Marketing ROI formula.

To know the right metrics to track, answer the questions below;

  • What actions does your target audience take after the social media campaign?
  • Do these actions align with your goals?

Create A Proper ROI Report

You can create a report if you have all the necessary data in your care.

A copy of this report can be sent to all business stakeholders to see the effect of social media marketing on their businesses.

Below are some tips for creating an excellent social media ROI report:

  • Get a good social media report template online. You can create yours, too, if you can.
  • Use simple English. Nobody should pick up a dictionary when going through your report.
  • Ensure that the report aligns with the goal of the business.
  • Show the metric you were not able to measure.
  • Anyone can tell from the report if the investment was profitable or lost.

Conclusion

Measuring your social media marketing ROI shouldn’t be complicated if you follow the tips discussed in this article today.

Regardless of your ROI value, you should always strive to improve by testing and optimizing for better results.

Meanwhile, we realized that many people go online to search for ‘how to measure social media marketing ROI,’ so ensure that you share this article to expand its reach.

And if you’ve got other tips working for you, don’t hesitate to share them with us.

Originally published on May 13, 2022; republished July 18, 2023, to add a video. Republished December 26, 2023, to update content and video. 

Expert Tips on How to Measure Social Media Marketing ROI

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