How to measure ROI from Social Media

It’s a continuing challenge for marketers to ensure that we provide accurate data on the return on investment on our marketing efforts. But social more than any other channel has proved difficult to justify expenditure on.

Organisations of all sizes need to ensure that marketing expenditure is contributing towards success across the overall strategy and contributes to growth. This is most effectively demonstrated by understanding the ROI (return on investment) of this channel.

This is not just important to consider for justification of budgets or resource planning, but also to allow for better budget allocation and expenditure priorities ensuring your investment in the areas that contribute most to growth.

Return on investment is usually measured solely as the monetary value return from all the time, money and resource that has been invested in the channel. But ROI shouldn’t just be measured as a monetary value but should be measured across your other objectives such as customer satisfaction, brand awareness and audience.

But in this article, we’re going to focus on measuring ROI by revenue as this is the most common measure and one which we would recommend implementing across all of your marketing channels.

The formula behind ROI is quite simple:

Profit = revenue – cost of sale
Investment = resource + ad spend + content (+ any additional costs)


Profit / Investment x 100 = ROI%

Example: If you took £10,000 in profit from social media activity having invested £5,000 then your return on investment would be 100%.


Profit – Investment = ROI

Example: If you took £10,000 in profit from social media activity having invested £5,000 then your return on investment would be £5,000.

Some businesses won’t be able to attribute sales directly to social media, and tracking of lead source or acquisition is something that Matrix can help implement effectively into your business. But even if you can’t track which sales came from social media, you can still measure its return on investment.

Take a look at your organisation’s other goals and objectives. If you’re planning on increasing customer satisfaction then this can be measured by tickets closed originating from social media paired with data from your customer feedback.

If you’re aiming to increase brand awareness then social media ROI can be measured using reach & engagement. But with effective analytics you can also track return on investment from other customer activities such as website visits, software downloads, mailing list sends and many more actions.

All of this, hinges upon having effective analytics tools which have been implemented to suit your business processes and functions. Matrix can implement analytics tools at various stages of the online and offline customer journey, both during the development of new websites software or processes or within existing websites, software and processes.