How do you measure roi for social media marketing? any techniques or formulas?

Likes are great for brand image & organic reach. But this necessarily doesnt mean that these likes = revenue.

You could use Facebook Pixels from your Power Editor, and set up the campaign strategy as Cost Per Conversion campaign (FB is exceptionally good at get your Target CPA) 

Cost-per-Conversion Campaign --> pay by impressions.

Every single social media platform has a pixel or a piece of code that you could use to track ROI.

I wouldnt use GA to track ROI from social media, 21% of FB traffic gets misattributed to direct in GA!

in social media return of investment means ROI = (return – investment) / investment %.

ROI = (return – investment) / investment %.

This means that if you increase your return while keeping your investment the same, then you increase your ROI. This is good. If you decrease your return while keeping your investment the same, then the ROI goes down. That’s bad. A high ROI is better than a low ROI.

 Because the ROI formula uses only two inputs – the return and the investment – the ROI formula is an easy way to measure and compare marketing campaigns.

Thanks Ali for posting a intuitive question in this section.

From my10 years experience I learned a lot about online marketing and still learning! I helped various concerns using the simple social media - ROI strategy and I shared the same in this section. 

Like  any  business  endeavor,  you  naturally  want  to  have  a  fair  idea  on  the  return  of  your investment in social media and not simply jump right in just because it’s the popular thing. 

 

The ROI cycle of social media can be separated into three stages. 

 

LAUNCH ----------------------------- MANAGEMENT ----------------------------- OPTIMIZATION

 

Stage1: The Launch 

At this stage,100% of your focus is on setting up accounts on the5 Social Packs: Facebook, Twitter, Google+, LinkedIn and YouTube. While there are a number of other popular social networking sites, the5 are considered to be the critically important ones. You simply can’t afford not to have presence on all5 platforms. 

 

The Launch stage is more of executional with the primary goal of getting started. Here are the details of this stage: 

 

Approach:  Executional

Objectives:   Social Media Presence

Focus:     Short-Term

Results:  Negligible

 

At this point, you won’t be able to expect any significant impact or derive results.

 

Stage2: Management

At this stage, about60% of your company’s efforts will be focused on developing the5 social media sites. About10% of the focus is directed towards the creative and brand offer and20% on  setting  up quantitative  metrics  like  inbound  links,  traffic,  Facebook  “likes”,  etc.    The remaining  10%  will  be focused  on  qualitative  metrics  such  as  survey  results,  pools  and studying brand sentiment. 

 

Approach:  Tactical

Objectives:   Customer Engagement

Focus:     Mid-Term

Results:  Increase in Traffic

 

Stage3: Optimization

During the Optimization stage,25% of the focus is on gaining more leverage on all5 social media  platforms,  and  30%  will  be  distributed  to  creative  and  brand  offer  development,  as well as the quantitative and qualitative metrics. The other25% of the focus will be directed to improving the conversion rate and the optimization of campaigns. The remaining20% will be used to measure success of the campaign which will be the basis of your ROI. 

 

Approach:  Strategic

Objectives:   Social Media ROI

Focus:     Long-Term

Results:  Increase in Revenue

 

Despite what many social experts claim that ROI of social media cannot be measured, there is actually  a  way  to  measure  it.  This  process  will  require  a  better  understanding  of  your customer lifetime value (CLV) or the average revenue generated by a customer during their entire engagement  period  with  your  products  and  services.  This  figure  will  be  used  to compare the results that have been generated on your campaign in social media. 

 

For example: 

 

If a typical customer spends about $10 every  month on a particular product and has been a loyal patron  of  a  certain  brand  for  about  3  years,  this  equates  to  the  average  customer lifetime value of $360.00.

 

Most  companies  are  willing  to  spend  about  10%  of  their  CLV  for  the  acquisition  of  new customers.  This  means,  they  are  willing  to  spend  $36  to  acquire  a  new  customer  who  is expected to spend $360 all throughout her engagement with the brand. 

 

So if your social media efforts will cost you $36,000 for one full year, and your campaign will be able to generate1,000 new customers every year, then you definitely have a clear winner in your hands.

 

I hope my answer would help you in understanding the stages of social media ROI.

 

Your comments are most welcome.

 

Thanks and Regards

Feroz Khan Saleem

Measuring ROI for social media can be a bit of a puzzle, but here's my take on it. I start by using Google Analytics to set up goals and track conversions directly from social media. Unique tracking links are a must for tying sales and leads back to specific campaigns. Don’t forget to factor in engagement metrics like likes and shares-they show how well your content is connecting with people. Also, I always include multi-touch attribution to capture those clicks that don’t convert immediately but eventually lead to sales through other channels or direct visits. It really helps to see the full impact of your social media efforts.

There are several techniques and formulas that can be used to measure the return on investment (ROI) for social media marketing. Here are a few common methods: The basic ROI formula: (Revenue generated from social media - cost of social media marketing) / cost of social media marketing. This formula will give you a percentage that represents the return on investment. Cost per lead or conversion: Divide the cost of the social media campaign by the number of leads or conversions generated. This will give you an idea of how much it costs to acquire a new customer or lead through social media. Engagement rate: Divide the number of likes, shares, comments, or other engagement metrics by the total number of followers or reach. This will give you an idea of how well your content is resonating with your audience. Social media attribution: attribute revenue generated to the source of the customer journey, whether it's social media, paid search, organic search, etc. Return on Ad Spend (ROAS): This measures the revenue generated from a social media campaign divided by the ad spend. This will give you an idea of how much revenue is generated for every dollar spent on advertising. These are just a few examples, and the best method will depend on the specific goals and metrics of your social media marketing efforts. It's also important to keep in mind that social media ROI is not always easy to measure, and it's important to establish clear goals, metrics and track them regularly in order to evaluate the effectiveness of your campaigns. Watsapp Status ChatGPT Jan 9 Version. Free Research Preview

try my best to achieve the goals in my capacity and I will surely take his guidance how can i do it.

You're right, measuring ROI from social media marketing isn’t always straightforward. While platforms like Google Analytics (via Goals, UTMs, and eCommerce tracking) give a decent estimate, there are other powerful techniques and formulas you can use to assess the true value your campaigns deliver.

Core ROI Formula:

The basic ROI formula still applies to social media:

ROI = (Net Profit from Social Media / Social Media Investment) ×

But since social media often drives indirect value (brand awareness, engagement, etc.), it helps to break ROI down into quantifiable and qualitative components.

Techniques to Measure Social Media ROI:

1. Conversion Tracking (Beyond Google Analytics): Platforms like Facebook Pixel, LinkedIn Insight Tag, and TikTok Pixel help track user actions post-click (leads, sales, form fills, etc.). You can assign custom values to these conversions.

2. UTM Parameters + Campaign Tagging: Always tag your links with UTMs. Tools like Google’s Campaign URL Builder let you track traffic source, campaign, and content across platforms.

3. CRM Integration: Integrate your campaigns with a CRM like HubSpot or Zoho to monitor lead quality and sales closure rates directly from social channels.

4. Attribution Modeling: Use multi-touch attribution in GA4 or third-party tools to understand how social contributes across the customer journey, not just the last click.

5. Engagement Value Metrics: While likes and shares aren’t direct revenue, tracking cost-per-engagement (CPE) and comparing it with lifetime customer value (LTV) helps assign indirect ROI.

6. Revenue from Retargeting: Measure how much revenue your social media retargeting ads generate—these often convert higher than first-touch campaigns.

7. Organic ROI Tracking: For non-paid content, use tools like Buffer, Hootsuite, or Sprout Social to track reach, clicks, shares, and traffic. Then compare these metrics with website goal completions.

Example in Practice:

A reputed Social Media Marketing Agency in India would usually follow a layered measurement model—tying content goals (traffic, engagement), lead goals (form fills, signups), and revenue goals (sales or MQLs).

Agencies like Logelite Pvt. Ltd. follow a data-driven and performance-first approach, helping businesses map out a proper content-to-conversion flow. They also build detailed reporting dashboards so clients can monitor ROI across campaigns.

Final Thought:

ROI for social media is not just about numbers; it’s about context—how each campaign supports your overall marketing goals. Align your KPIs with business objectives (e.g., increase leads, boost retention, drive traffic), and use a mix of tools to track both short-term returns and long-term impact.

If you're working with a skilled social media marketing agency in India, they’ll help you build that strategy and measure what truly matters, not just vanity metrics.

ROI MEANS RETURN OF AN INVESTMENT, IT IS MEASURED BY DIVIDING INVESTMENT RETURN WITH THE INVESTMENT COST, ITS USUALLY EXPRESSED IN RETIO OR PERCENTAGE

One has to learn Web Analytics for that.

Number of users/Likes is not basically the matter but the major & the most essential phase where the internet marketing expert has to focus in Social Media Management is that, its not only the matter of branding but to make it the most successful community where the users would love to engage with it frequently. This will really gauge your true success in Social Media Marketing. Have a Nice Day.

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