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How to Measure Social Media ROI – Is It Even Possible?

Social Media MascotIt seems preposterous to suggest that there are online companies that put time and money into social media and don’t bother to measure their return on investment (ROI). In fact, it is believed that over 70% of online businesses that utilize social media as part of their marketing drive are guilty of this crime. When you consider the fact that sales from social media commerce are in the billions of dollars, this is an unbelievable statistic. Some experts believe that discovering social media ROI is an impossibility because it relies on too many intangibles, such as “Likes” and “followers.” However, such information can be used to paint an accurate picture of a company’s ROI if used correctly.

Calculate Your Reach

You need to determine how many people you could potentially connect with on social media. In effect, this equates to the number of Facebook fans and Twitter followers you have. However, this is not the end of the story. Your content reach is limited only to the amount of friends and followers that people who engage with your brand have. For example, if you have 500 followers on Facebook and Twitter and they have a combined total of 10,000 followers, then your content reach is 10,500.

Time & Trust

Every single comment, photo, video or post takes a few seconds for a user to digest. It is estimated that the average “like” on Facebook takes seven seconds per person while close friends of this person will take an average of five seconds to digest that “like.” Now, you need to look at how many close friends shared the brand experience. On Facebook, analyze the comment to like a ratio of posts while on Twitter; the retweet to tweet ratio is all-important. The higher these ratios, the better.


This is a measure of how your business is perceived on social networks. It can be extremely difficult to measure sentiment although you do need to compare the number of positive and negative mentions. Fortunately, you don’t have to spend hours painstakingly going through tweets to find out what is being said. It is possible to get natural language processing tools from a variety of sites online that will quickly and effectively help you discover whether mentions of your company are positive or negative.


If you really wish to calculate the ROI on social media, it is imperative that your company has clearly defined goals because ROI is impossible to calculate without a baseline of some sort. When it comes to calculating your ROI, it’s essential to note that you need to focus on what the numbers lead to rather than concentrating solely on the actual numbers. For example, does an increase in website visits actually lead to a higher income? Do people who find your site through social media click on your website’s product pages? You can find all the data you need through the use of Google Analytics, HootSuite, Omniture and other sites of this nature.

Using The Data

This is where it gets tough and is also where certain experts suggest that social media ROI can’t be accurately measured. And they have a point because coming up with the dollars and cents of your campaign is virtually impossible to nail down because there is some guesswork involved. Nonetheless, you can give it a pretty good go.

For example, you can go back to your goals. If you are measuring ROI through sales, you will need to analyze the metrics from your monitoring tools to see if your level of sales has increased. If it has, you can then look at the number of referrers on your e-commerce site from Twitter or Facebook or the amount of coupons given away in a Facebook offer. It is also necessary to look at trends. For instance, did your website store experience a spike in traffic soon after you posted on Facebook? Is it the case where a high sentiment analysis on Twitter results in better sales?


In the end, it is important to realize that measuring social media ROI is far more complex than the usual cost versus increase in sales equation we are used to measuring. While you can find out if social media is positively impacting your business, it isn’t possible at this point to know its full effect.

Ultimately, there are far too many variables to limit social media to a single fixed point. Additionally, social ROI is inevitably delayed ROI because it takes time for a post to resonate with the customers to the point where they go from visitors to paid customers. You can’t pinpoint when a certain customer decided to make this switch either. What you can do is stop being so focused on social ROI and concentrate instead on finding out what you have learned from your customers.

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  • Brian Loebig's picture
    Feb 4 Posted 4 years ago Brian Loebig

    I prefer the remark attributed to Erik Qualman of, which says that the ROI of social media is that you'll still be in business in five years! I don't think a true ROI can be calculated and for myself it would be a waste of time to try and measure it. As a small business consultant I keep in touch regularly with my clients via social media and I believe that these connections have lead to repeat business, but I am not going to count the number tweets to client A to measure the return on repeat business. Thanks for the article Michael. Making us think is always a useful exercise.

  • Jan 4 Posted 4 years ago jtislerics

    I call bologne on your suggestion for calculating reach:

    "Your content reach is limited only to the amount of friends and followers that people who engage with your brand have. For example, if you have 500 followers on Facebook and Twitter and they have a combined total of 10,000 followers, then your content reach is 10,500."


    If my organization has 500 FB and Twitter followers and I post something, only 5-10% of my FB fans will see the (unsponsored) post, and only a limited number of their friends/followers will see that they "Liked" or commented on my post. 

    I haven't seen an accurate way to estimate how many Twitter followers actually see each of my organization's posts - it depends who is on Twitter, when, and how many people they are following (how much their feed changes minute-to-minute).

    Any given message I post on FB or Twitter has a much more limited potential reach than the total of my fans and their followers/friends.

  • scalablesocial's picture
    Jan 4 Posted 4 years ago scalablesocial

    I do love this topic, because it is something we struggle with all the time!  However, I have yet to find any sentiment monitoring program that comes close to being accurate.  Most of the time, mentions of "my" company, are not about my company at all.  Have you found one that works well?

    We have our new clients set up a virtual phone number when they sign up, and we use that for all our marketing efforts.  We also have access to that account so we can report on how many calls they got just because of what WE did.  It's pretty powerful.

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