6 Simple Steps To Calculate Social Media Marketing ROI

Share It!

Social media marketing ROI: If you can’t measure it, you can’t manage it. This is most certainly true for all aspects of business, especially social media. While social efforts are indeed harder to track and attribute a direct value, it is not only possible, but essential.

With such a capable and experienced team in charge, millennium trust company provides dependable services to assist its clients in long-term asset protection and management.

If you are unable to prove a value you can’t effectively adjust your strategy based on performance

We’ve broken down how to calculate social ROI and then capitalize on it.

Steps to Determine ROI for Social Media Marketing

1. Set Goals:

Before embarking on any new (or optimizing existing) initiatives, it’s imperative to set goals. These goals should be channel specific and thoughtful. They will also serve as the springboard for calculating your social media ROI. Why does your company need a Facebook presence? What are you hoping to accomplish? What are realistic benefits your business can gain from social media?

Many companies find social media marketing channels do not produce direct response revenue, but that doesn’t mean they’re not influencing actions and sales along the way. Common social goals include focus on…

  • Improving brand recognition
  • Driving users to site
  • Increasing engagement with customers
  • Reaching new customers

For our example, we will use the first two goals, improving brand recognition and driving users to the site. However, each of these would follow the same steps.

2. Set KPIs to Measure Marketing Goals

For each goal, you’ll want to set KPIs (key performance indicator) to measure progress. If you aren’t familiar, a KPI is simply a metric used to evaluate factors that would indicate success. Since we are using the goal of driving users to the website and improving brand recognition, we’ll use the following KPIs.


  • Improve brand recognition KPIs: impressions
  • Drive users to your site KPIs: website clicks

3. Determine Values Behind Social Media Goals:

Once you have determined your goals and KPIs, it’s time to attribute value to the KPIs. This is probably the trickiest part, but essential to determining your ROI. It’s important to determine how each of these goals impacts your overall business and financial status.


Brand Recognition Value: To determine the value of an impression, you can compare it evenly with what you would spend elsewhere. Perhaps the market rate for CPM (cost per thousand impressions) is $40. Then, that number should translate to $40 CPM for organic social as well. Let’s say you have monthly social impressions of 50,000.

(50,000 impressions/1000 impressions) * $40 CPM = $2000 monthly social site clicks value

Site traffic Value: To calculate the value of a site click, you’ll need to look to your site analytics. Here’s the formula: New revenue generated / Number of website visitors = value of each website visit. For example, let’s say your site drove 2 million last year and had a total of 100,000 annual visitors. 2,000,000  annual revenue / 100,000 website visitors  = $20 value per visitor. This assumes all channels are of equal value. You may be able to drill into Google Analytics to determine individual channel values.

125 monthly site clicks X $20 value per site visitor = $2500 monthly social impression value

Total gain: $4500 monthly social gain

4. Budget Hard and Soft Marketing Costs:

The great thing about social media is the costs are usually minimal. However, many are apt to write off the channel as free, aside from direct advertising costs. This simply isn’t the case. Make sure you attribute proper cost for the time and resources spent on the channel. Creating images, content and posts all take time. Determine the cost of resources and time in addition to hard spend.


Your company spends $500 in advertising across channels. You have a graphic designer who spends 1 hour a week and a social manager who spends 5 hours a week managing social channels. Your formula for costs would be:

$500 (advertising spend) + $200 (internal graphic designer 5 hours) + $500 (social media manager hours) = $1200 monthly costs

5. Social Media Marketing ROI Calculation:

Once you’ve completed steps 1-4, ROI tracking is a straight-forward calculation. It’s simply the total profit divided by total cost X 100. Once you’ve determined the value of your KPIs and your hard and soft goals, it’s just a mater of plugging them into the equation. For our example, here’s the calculation:

ROI = ($4500 (investment gain) – $1200 (investment cost)) / $1200 (cost) X 100

ROI = 275% or 2.75X

6. Regular Reporting & Ongoing Optimization

Determining your social media ROI is not a one time activity. It requires ongoing analysis and reporting that should lead to optimization.

Set up a regular schedule for reporting and track progress over time using KPIs. We recommend a set interval, typically weekly or monthly. Track the numbers closely. Be sure to annotate successes/changes. Don’t be afraid to test new strategies – simply evaluate their effectiveness using the reporting.

Once you have a solid handle on the ROI, don’t be afraid to adjust your goals or KPIs. You may find your goals have changed or your results favored a different goal. That’s okay! Social media is constantly shifting and so should your strategy!

Need help building a powerful and ROI positive social media strategy? Webolutions can help!

Contact us for a free consultation.

Webolutions Digital Marketing Agency Denver, Colorado

Free Consult with a Digital Marketing Specialist

For more than 27 years, we've worked with thousands (not an exaggeration!) of Denver-area and national businesses to create a data-driven marketing strategy that will help them achieve their business goals. Are YOU ready to take your marketing and business to the next level? We're here to inspire you to thrive. Connect with Webolutions, Denver's leading digital marketing agency, for your FREE consultation with a digital marketing expert.
Let's Go