Calculating the ROI on your Social Media Marketing Efforts

Calculating the ROI on your Social Media Marketing Efforts

Follow these all ROI measurement methodologies to calculate the ROI on your social media marketing efforts to find the source of the conversions and measure the actual ROI.

ROI is the general abbreviation for return on investment. This is basically measured in terms of percentage change, with the objective of portraying the demonstrable and measurable benefit of your investment in a given product.

Recommended: Is Investing in Social Media Marketing Worthwhile? What Should Be ROI?

The best example that can be referenced for ROI, is the investment decision made by Daniel into his business.

Daniel is a minor businessperson, who owns a footwear boutique at the end of the town. His monthly profits amount to almost $7000.

However, since his shop is at the end of the town, he decides to give a slight boost to his sales by running ads about his boutique.

So, Daniel approaches the local newspaper agency and invests $300 for an advertisement to be shown in the newspapers along with a promotional QR code for a discount. This QR code (which can be generated using one of these best QR code generators)  plays the role of an instrument to measure his source of profit generation, thereby helping him calculate the actual ROI.

Dramatically, Daniel was able to make a profit of additional $2000 the very next day after publishing the advertisement. This marks his overall ROI at 567%.

We arrived at this denomination by subtracting the investment value of $300 from the profits that was he earned owing to this investment, and then dividing the resulting value by the initial investment value again.

If he had failed to make a profit out of his investment, there would have been a subsequent decrease in the ROI also.

The above-mentioned example is that of a practical form that includes tangible things such as advertisements, money, goods and commodities. Hence, the process of ROI measurement was excessively easy.

Same is not the case when it comes to measuring the ROI of your social media marketing efforts, as it includes several intangible variables such as vast opportunities to increase the incoming traffic, efforts put in to increase the brand awareness, SEO optimization etc.

It might look easy to carry out a social media marketing campaign and garner enough sales for your product. However, it is definitely a task of utmost complexity to find the source of the conversions and measure the actual ROI.

This is because of the fact that there are various technical issues that make the calculation of social media marketing, a mundane activity.

But thankfully, there are a bunch of strategy hacks that can be put in place to help you measure the ROI of all the social media marketing efforts that you have put in.

And as you read through, we will be revealing to you the details of these following ROI measurement methodologies:

  • Outlining your social media intentions
  • Setting up an incubation period
  • Efficient strategy development
  • Tracking the behavior metrics and analytics
  • Destruction of conversion bias through attribution reports

1. Outlining Your Social Media Intentions

Imagine a situation where you went for a jungle safari and were left behind by your peers. As a result, you are stranded alone in the middle of the Jungle and the only way to reach back the camping site is to travel by foot.

So you start your on-foot journey with excessive energy and enthusiasm. You keep travelling for several hours only to get stuck deeper into the jungle.

The question is what exactly is the key factor that you are missing out to follow, in this scenario?

Well, it is the lack of a proper objective and action plan. You did not set an objective to reach a particular place. You also did not have an action plan to achieve your objective, but instead, you just kept on walking and wasting your energy.

Same principle applies to the ROI measurement for your social media marketing. You should always have a clear cut -objective behind each activity that you carry out for your social media marketing. The following points should be taken into consideration while setting up your goals or objectives:

  • The setting up or identification of goals should not be done for the overall activity list. It should be implemented on a per-campaign or per-channel basis. This will help you narrow out the main reasons for conversions such as reasons owing to any promotional activity or seasonal upticks or a really optimized link.
  • Direct the goals of sales focused campaigns towards metrics like sign-ups and actual conversions, unlike the awareness building campaigns that are focused only towards reach and engagement rates.

It is always the right goals and actions, which determine the percentage of ROI that you are going to reap in the future.

2. Setting Up an Incubation Period

As the saying goes : "Rome wasn't built in a day", it is pretty much evident that accumulating enough bricks to build your social media marketing fortress with a high yielding ROI is definitely going to take time.

Nevertheless, it is a continuous process. The goals that you set should not be accomplished for just a shorter period and then expect it to give returns by its own. Once your goals have been defined, it is always mandatory for you to decide the timeline in which it can be accomplished.

Moreover, these timelines will have multiple sub-categories where shorter goals will be set and achieved. This will help maintain continuity in the series of action plan and ensure that the targets are never missed.

Such fragmentation of the overall goal prescription will give you a structured prediction of the ROI that you have been incubating throughout the month.

3. Efficient Strategy Development

A highly organized action plan will always pave the way for accomplished goals and objectives. There should always be an efficient methodology in place to ensure that you are taking the right step to reach your target.

Efficient Strategy Development

There are many ways to incorporate potent ROI measurement actions plans in your social media marketing such as :

  • Creating and applying UTM codes using Google UTM building tool. The inclusion of UTM codes in your links will give you the detailed performance report of each and every campaign, especially the hits that each page received, along with its source.
  • Using tools like Bitly to shorten your URL links and make use of its advanced tracking system to get a hold on the source of the conversions.

4. Tracking the Behavior Metrics And Analytics

You cannot win a race until you are aware of your speed. And for a social media marketing platform, your analytic tools are your odometer. These tools let you know your position and the result of all the efforts that you have put in.

And the best way to track your progress, is by making optimum use of the google analytics services.

The ROI calculation on google analytics can be carried out through cost analysis and ROI analysis. On the basis of these reports, you will be able to calculate the return on advertising spend (ROAS).

Once you have an accurate value for your ROAS, you will be able to predict your ROI for various marketing campaigns such as :

  • Facebook advertisement campaign
  • Bidding advertisements
  • Affiliate, E-mail and display campaigns

5. Destruction of Conversion Bias Through Attribution Reports

Measurement is a prime area where most of the online social media marketers find it difficult to maintain stability, with only 21% of the overall crowd claiming to be successful at tracking their ROIs.

With a prominent fact that there are certain uncontrollable factors that affect the conversion rate of a website, the outputs start showing the side effects of a biased influence. And the measurement of ROIs during such scenarios can be done through attribution reports.

There are various attribution models that you can follow such as:

  • First touch attribution model
  • Last touch attribution model
  • Multi touch attribution model ( this includes both linear and time-decay attribution models )


Tracking your ROI on the social media platform is definitely not an easy task. Most of the players out there do not even have a proper system to measure the ROI.

So, to ensure an accurate and timely measurement of the ROI on your social media campaign, you should make sure to put into practice these above-mentioned methodologies. Because it is always important to be aware of the direction to look, to decide about the payoff.

This post was submitted by a TNS experts. Check out our Contributor page for details about how you can share your ideas on digital marketing, SEO, social media, growth hacking and content marketing with our audience.

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