April 28, 2015

How to Assign ROI Value to Social Media Metrics

Social media continues to be a major marketing platform for any business. But, some marketers still are unsure about how much they should invest and even more, how to measure their results. Return on investment in social media can be difficult to pin down, but one thing is surethe narrative in the industry is rapidly changing.

The king of all marketing buzzwords, “ROI,” represents the keystone metric in any progress or analytics report. The truth is, investments are just as subjective as returns. There are a vast array of metrics on social media, but there are discrepancies in which measures are truly important to monitor.

We’ve surely paid close attention to the following social media metrics for our business, but are they the right ones? The industry is changing, and so is the way we measure ROI.

Page Growth

What is the point in monitoring your growth if it’s not directly tied into how many of those people are actually engaging with you? With the rise of social media advertising, you don’t need to grow a large audience to have your content be served to a large audience. We should stop thinking about increased follower count and number of likes on Facebook as an accurate source of return on investment. Furthermore, with Facebook’s continued restrictions on brand posts and organic reach, it’s not outrageous to think that one day, follower counts will be completely irrelevant.

Website Referrals

Website traffic numbers are a great source of measuring return on investment. Your website can be the selling point for your business and driving people to it from social media will be extremely beneficial and efficient. It’s important to note that the metric to focus on here should be unique visitors, as well. Total visits is great, but unique visits ensure that different people are being directed to your page, which can increase your chances for qualified leads or conversions (see below). If more than 20-25% of your website traffic is coming from social media, you’re in great shape. Studies have shown that percentage of web referrals from social media have doubled year over year, therefore making the investment on social worthwhile.


Engagements on social media no longer provide a compelling ROI story. Chances are, your overall business goals aren’t tied in to a certain number of retweets or likes generated from social in a particular week. That is not to say that engagements are not important to your success on social media. They do provide an overview of your community sentiment and can essentially become the entry point to a successful sales funnel. However, it does not make sense to attribute a monetary amount to an individual social engagement such as a like, comment, or share.

Engagement Rate

Unlike individual engagements, engagement rate can actually tell a story and provide value. Engagement rate can be calculated simply by dividing your total number of engagements by your total reach on a specific social media post. It’s not compelling to reach a large number of people if the people you reach aren’t engaging with you. Conversely, you don’t have to reach a large number of people to increase your chances for engagements. You just need to reach the right people. That said…


Marketing keynote speaker and best-selling author Jay Baer said it best: “The end goal is action, not eyeballs.” It doesn’t make sense to think about your reach and impressions if you aren’t subsequently factoring in your engagement rate. With the volume of content growing so rapidly, we’re moving in a direction where impressions and reach will increasingly provide little value in the social media space.


Conversions are the first steps towards generating loyalty and brand advocacy through social media marketing. Think about how many people are acting towards your desired results on social. That is a number into which we can all sink our teeth. Conversions include: leads, sign-ups, subscriptions, downloads and transactions. Start thinking about revenue generated as well. How much money are you generating directly from social media? Whether you sell a product or a service, or you are raising money for a cause, revenue generated is the ultimate success measurement when it comes to ROI.

The social media industry changes at a rapid pace. Subsequently, so does how we measure return on investment. Stay up to date with which measurements are important and which ones are losing value, and you’ll have a leg up on the competition moving forward.

What measurements do you find most valuable in the social media space?

Tags: Best Practices, Content Marketing, Strategy, Tools

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