Can Social Media ROI be calculated?

Much like any form of marketing there are aspects that can be measured and others that might require more guesswork. While the exact calculations may not be entirely accurate, avoid hiring any agency, consultant, or employee claiming that ROI measurement is impossible. Let us see more about this today


There are several KPIs that can be measured to evaluate the success of your campaign, and include engagement per post, reach, clicks and conversion. These can often be measured using free tools and depend on the goal of the campaign.

Sentiment and brand awareness may be pretty difficult to measure, but there are some paid tools out there that analyze online chatter and deliver a pretty good ballpark figure

There are scenarios where you can calculate them and then there certain scenarios where you just can’t.

Let me first address the ‘Can’ part first:

If you are selling a product or service, the easiest way to calculate the ROI of your social media efforts is by tracking the visitors that come to your website via social media channels and how many of them convert into customers.
You can track this using any advanced Analytics tool. Even Google Analytics can help you track it.

If you are running a discount campaign, you can use Facebook Offers. Your ROI here will involve the amount of time and ad money you spent on promoting the offer and the total profit earned by selling those products.
You will be using specific discount codes when running Facebook Offers, so you can easily track the sales by tracking the redemption of those codes.

Now let’s have a look at a scenario where you Can’t calculate the ROI:

I started using Twitter actively sometime last year. Almost every other week I would see people praising Flipkart (Indian ecomm brand to those who don’t know) on my timeline. Yes, I had heard about Flipkart before but I was reading real world reviews about its awesomeness.

I never ‘followed’ flipkart on Twitter (until few weeks back) nor did I ever click on any URL they shared on Twitter. But in the last one year I have made purchases more than Rs. 50k from them.

Now how will Flipkart calculate the ROI in my case? They have no idea I became their customer because of social media.

I am sure there will be countless others like me whose ROI cannot be gauged by brands.

Strictly and analytically speaking, the calculation is very possible, if you use a little logic and a lot of analytic reasoning.

Tracking your social media conversion rate is an essential part of proving your worth to your company. Without being able to confidently say “I make you money”, you might find your way out the door.

Its all about Analytics
Use GA or whatever traffic tracking source you would like. Once you know where your traffic is coming from (facebook, twitter, linked in, wherever) apply your sites standard conversion rate.

You conversion rate = your goal / traffic
In my case, conversion rate = subscriptions/traffic

Your Conversion rate is at the core of every fiscal conversation you will ever have with you boss, SO KNOW IT!

Now that you have the idea and your conversion rate, apply it to your traffic source.


If 3450 visitors came from facebook in week and your conversion rate is .077 (1/13), than its simple.

3450 * .077 = 266 subscriptions

Quick hint: break down each social media outlet to evaluate which source is most time effective. No use spending 20 hours a week on Pinterest if 80% of social media traffic comes from Twitter

So what do you think? Can you? or can’t you? Let me know


3 comments on “Can Social Media ROI be calculated?

  1. Great Thanks for this post. I wanted to know about more ROI knowledge from Social Media. ROI metrics system/ ROI based campaigns. Please refer some link or content.

  2. Pingback: How Do You Measure the Effectiveness of New Media? – As Best as You Can | New Media Marketing

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