How Are You Measuring Social Media ROI?

Dec 11, 2012 by

This entry was written by , one of the OxonDigital members. The author's views below are entirely their own and may not reflect the views of OxonDigital.
How Are You Measuring Social Media ROI?

Are you measuring ROI (return on investment) on your social media efforts? Many businesses are not, so how do you justify the time you spend nurturing relationships and building a community?

One of the reasons many forget to measure the ROI of social media is that it isn’t as straightforward as it is with other forms of marketing. Take SEO for example – if you know your clickthrough rate, your conversion rate and your average sale price, then you can place a £ sign on how much a particular keyword is worth to you.

How to measure social media ROI?

You can do a similar thing in social media, but not for all of your activities. At a very basic level, you can measure the ROI from a tweet, a Facebook post or a LinkedIn status update:

  1. How many people clicked on the link you shared?
  2. How many of those people went on to convert?

There you have it, you’ve measured how much your tweet was worth. The only complication here is calculating conversions, and for that you’ll need to set up goals in your analytics tools, but that’s a subject for a different post.

But, how do you place a value on the relationships you’ve built? On the things you’ve learnt from others in the industry? On the brand building that has taken place? While these and other outcomes of social media engagement do indeed result in more business, you cannot assign value to them as it would be virtually impossible to do.

Take networking (offline) for instance. Outside of instances where you’ve met someone who directly turned into a client or partner in some way, how do you measure the ROI of the time you’ve spent networking? You may have built a name for yourself, a reputation for your company, created awareness of your brand as a whole; these things may result in business in the future, but you similarly cannot affix a value to it. Yet, we know it’s important, and we know it’s an activity we should take part in – we are aware of the potential benefits it can bring.

This is the same attitude we should be taking to social media. This isn’t to say we shouldn’t be tracking traffic and conversions in the way described above, because this is crucial too. Clients demand to see quantifiable results and you need to be able to demonstrate that their money is going toward something that is ultimately profitable. Without quantifiable results, how can you optimize and improve your strategy? You need data and you need to know how to make something out of it.

But you need to think of social media (and explain it to clients) in a broader way than that, because otherwise additional value and merit in growth as a social business may be overlooked.

How do you measure ROI for your social media efforts?

Do you think we should focus solely on that which we can place a direct profit value on?

Let us know in your comments below!

Kasia works as a Digital Account Executive at marketing & design agency, mark-making*. Her main love and role is in social media, but has a passion for everything digital and creative. Follow Kasia on Google+.


  1. In my view, there are 2 parts to measuring RoI.

    First, clarify the goal of the (social media investment) – e.g., sales leads, brand loyalty, innovation… Depending on the goal, we use different approaches. And, yes, there are ways. They may be imperfect, but then the same happens with TV adverts or sponsorships. For instance, brand loyalty may mean that you can charge a premium (then, calculate the price difference x number of units), that customers are more willing to recommend you (calculate how much you save in advertising), that they will buy from the lower shelf (calculate how much you save on retailers’ fees), that you speed the new product development or product testing phase, etc… A good reference on this is the book Marketing Accountability (no affiliate link: or, more generally, ‘How to measure anything’ (again, no affiliate link:

    Second, consider whether social media is the best way to achieve that goal. While social media users are happy to engage with organisations online ( early evidence is that they do not welcome the overt commercialization of social networks. That is, this is not an ideal space to generate sales (with some exceptions). So, if that is your goal, you would probably better to invest your money elsewhere. However, social networks are a great tool for customer service and innovation (as you mention in your post). This post looks at the outcome of a recent fundraising initiative using web 2.0 – it shows with numbers what we felt already: that in the new brave world of social media, it is about quality, not quantity:

    Great post. Thank you. I really liked your example of ‘real life’ networking – that’s where Social Media wins hands-down, in my humble opinion.

  2. Hi Kasia,

    I think the problem is that most organisations see ROI as a purely financial measure. I work for an organisation that essentially operates as a charity. It has no ecommerce and therefore no measurable return on online marketing activity. So we’ve adapted our online strategy accordingly – ROI for us is email signups, shares of content, engagement, etc.

    Another major issue is the problem of attribution. Ok, you might be able to measure the ROI of a tweet or a Facebook post using some basic analytics – but how do you know that tweet or post is responsible for the final purchase decision? Before the customer purchased, he/she may have seen a TV ad, online display ad, sponsored search result, product video, peer recommendation, product review, anything! Relying solely on the ‘last click’ model isn’t enough.

    But that’s a topic for another post… 🙂

  3. Hi Ana, thanks for sharing your thoughts! Yes, I think it is important that you are clear of your goals for social media – jumping into because everyone else is not a good enough reason! You need to be clear of what you hope to achieve through the use of social media and then you will know how to measure success and progress.

  4. Hi Alex, I couldn’t agree more that looking at social media ROI from a purely financial point is a problem. While understandably every business wants to be sure that their budget isn’t going to waste, in order to measure the gains of social media you need to look at it from a broader outlook. And yes, you’re right about the flaws in measuring ROI of a tweet or post, but it does at least provide us with something and is useful when used for comparisons, not as a measure to be taken on its own.


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