How to Measure Social Media ROI

Social media takes up a lot of time. How do you know if that time is well spent or if you should be focusing your efforts somewhere else or at least outsourcing it? Here’s how you can figure out your social media return on investment.

Nearly every business guru says that your business has to have a presence on social media. But most people forget that there’s nothing more valuable than their time. If you’re going to invest time into social media, you have to think about the return on your investment (ROI). If you’re paying for advertising or personnel to manage your social channels, the ROI is only partially tangible and measurable. So how do you measure it?

It Takes a Lot of Time

Social media takes a lot of time. One survey found that one-third of small business owners spend between 1 and 5 hours weekly managing their social media platforms while 25% spent between 6 and 10 hours. Most experts will tell you that any successful effort is going to take a considerable amount of time. Weigh the value of your time against the measurable return you receive.

How to Measure

Measuring the ROI of social media is difficult because a significant amount of the reward comes from brand impression. Getting your name in front of your potential customers is valuable even if they don’t purchase or even engage with your efforts. For some portion of your customers, you will never know that social media was the reason they found you.

This type of soft advertising is the reason big brands like Coca-Cola, Budweiser, and Nike run ads that seem more artistic than advertorial. Their goal is to keep their brand on your mind.

But you probably need a more direct approach to advertising. One where you can see a direct ROI. First, think about the funnel. The funnel is the journey your customer takes from first viewing your ad/post to purchasing your product or service. If you can measure various parts of the funnel, that will tell you if there’s a piece of your funnel that’s breaking down.

At the top of the funnel, customers first view your social media ad or post. Fortunately, the social media advertising platform you use provides detailed information about your ROI.

You can see how many people saw your post, how many clicked, and what it cost for each click. (Called the CPC) The goal is to get your CPC as low as possible while maintaining an audience that is likely to turn into revenue. Savvy marketers can get the CPC down to a few pennies in many cases but it’s industry-specific. Try different ad copy, images, and targets to get your cost as low as possible while still reaching a target audience that has the best chance of becoming a paying customer.

At the top of the funnel, measure your ROI using the metrics provided by the social media platform.

Your Website

Next, you can measure if they’re making it to your website and how long they stay. If you’re going to spend time and money on social media advertising, first set up a landing page for those customers. If you’re posting on Facebook, set up a landing page just for your Facebook audience. The pages don’t have to be a large-scale effort. Just copy your current landing page, change some copy that caters to the audience your targeted and the ad or post you ran, and publish it. If you get them to your website but they don’t move past your landing page, you know that social media did its job. It’s your landing page that needs work.

If you’re advertising a certain product, you’re probably sending them directly to the product page. If they reach the page but don’t purchase, you know that your product pages need some work. If your CPC was relatively low, you know that social media did its job.

What if You Hired Somebody?

Maybe you don’t have time to do your own social media but recognize the importance of it so you hired somebody? How do you know if they’re producing a reasonable ROI?

First, do not measure on activity. Anybody can post a bunch of content, “like” or retweet other people’s posts, and respond to people. If that’s all you want, you could hire your children for that.

Measure ROI on the same metrics you measured above. Are their efforts translating to more sales, traffic, or people in your doors? If you’re having an event, how many attended as a result of social media? Another goal to measure might be the increase in engagement. Are more people interacting with your brand as a result of this person’s efforts? You can measure engagement on each social media platform’s metrics. For Facebook, look at the Insights tab. On Twitter, click the small graph next to the star to see metrics.

Most important, set clear goals and expectations when you hire the person. Tell them how you will measure their performance. Let them know that you aren’t counting posts. You want to see real business results just as you would expect from any other person on your marketing team.


Remember that your time is valuable. How you measure the value of your time is largely up to you but if you’re spending 5 hours per week managing social media and you’re worth $50 an hour (that’s probably low), you should see tangible benefits that justify that kind of financial outlay. That’s very difficult to measure but for some businesses, that’s only a couple of sales or contracts. If you’re in an industry that uses social media regularly, don’t lose the opportunity to reach your customers on social platforms.

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