How to Calculate Social Media ROI (Return on Investment)

By: Rafal Reyzer
Updated: Mar 7th, 2024

How to Calculate Social Media ROI (Return on Investment) - featured image

There are many metrics you can use to evaluate the effectiveness of your marketing efforts. One metric that’s particularly relevant today is Social Media Return on Investment (SM ROI).

This metric is used to assess the effectiveness of your marketing efforts on various platforms by measuring the actual sales generated. It indicates the returns on your investment and helps you determine if you are meeting your objectives and making profits. Additionally, it assists in planning future campaigns. Let’s delve deeper into this vital metric.

Understanding the ROI of Social Media

What is SM ROI?

The SM ROI involves a simple calculation: SM ROI = (Earnings – Costs) x 100 / Costs

Calculating Earnings and Costs Related to Social Media Campaigns

Included in the earnings calculation is revenue generated from social media campaigns. It also includes any cost savings or efficiencies achieved through social media activities. Here, proper attribution of sales to referred traffic from social media channels is key. All the expenses associated with running these campaigns, including advertising costs, content creation, social media management tools, and personnel are part of the cost calculation.

a man jumping and holding a plushy instagram like

Social media is where the attention of consumers is at, but you need to be careful and don’t overspend on unprofitable campaigns!

Practical Example: Handmade Jewelry Company

Let’s see what this looks like in a business scenario. Consider a company that creates handmade jewelry. During a 90-day social media marketing campaign, they want to check their SM ROI to see if they are getting a positive return on their investment.

  • Their campaign’s primary goal was to increase online sales of their jewelry.
  • With ad spend, content creation, and social media management tools, the company spent $5,000.
  • The company documented $15,000 in revenue that resulted from this marketing effort. Sales from customers who clicked on social media for purchase are also included.

Calculating SM ROI Step-by-Step

Now you can begin to calculate the SM ROI. First, subtract the costs from the earnings.

$15,000 – $5,000 = $10,000.

Multiply the difference by 100.

$10,000 X 100 = 1,000,000

Finally, divide the answer by the cost.

1,000,000/5,000 = 200%

The resulting quotient is our SM ROI. If the ROI is positive your efforts are generating benefits. Conversely, a negative ROI suggests that adjustments to your strategy may be necessary.

Interpreting the Results

In this case, the company saw a 200% social media ROI. Essentially, for every dollar spent on their social media efforts, they gained two dollars in revenue directly linked to the campaign. This demonstrates a profitable return, marking the campaign’s success. While this is a basic example, it highlights the core idea. As you manage your campaigns, you’ll begin to identify patterns and question what elements enhance or hinder the social media return expected from your initiatives. This is where the true magic happens!

Tools and Techniques for Measuring Social Media ROI

Google Analytics

  • Benefits: Google Analytics is a free and powerful tool for tracking website traffic and conversions to aid in measuring the impact of your efforts on your website’s performance.
  • Key Features: Conversion tracking, goal setting, audience segmentation, traffic sources analysis, e-commerce tracking.
  • Pricing: Google Analytics is free for basic analytics. There’s also a premium version, Google Analytics 360, with advanced features, which comes with a cost.

Ruler Analytics

  • Benefits: Ruler Analytics is primarily a marketing attribution tool that helps businesses track the effectiveness of their campaigns, including those on social media.
  • Key Features: Multi-touch attribution, call tracking, form tracking, visitor journey tracking, and integration with various marketing platforms.
  • Pricing: Customized pricing based on the specific needs and scale of your business.


  • Benefits: Cyfe is a business dashboard and analytics platform that consolidates data from various sources, including social media, into customizable dashboards.
  • Key Features: Customizable dashboards, data visualization, integration with hundreds of data sources, alerts, and notifications.
  • Pricing: Offers both a free plan with limited features and a premium plan with more advanced capabilities.


  • Benefits: Part of Neil Patel’s suite of marketing tools, focuses on customer analytics and engagement tracking.
  • Key Features: Customer behavior tracking, cohort analysis, funnel analysis, A/B testing, campaign tracking, and segmentation.
  • Pricing: Available on request and is based on specific business needs and requirements.


  • Benefits: Provides a comprehensive suite of marketing and sales tools, including tracking social media ROI.
  • Key Features: Social media monitoring, lead tracking, email marketing, marketing automation, CRM, and reporting.
  • Pricing: Offers a range of pricing tiers, including a free plan and paid plans with more advanced capabilities.


  • Benefits: Known for its simplicity and ease of use in scheduling and analyzing marketing content.
  • Key Features: Content scheduling, engagement tracking, social media analytics, team collaboration, browser extension.
  • Pricing: Offers both free and paid plans, with the latter starting at a monthly subscription fee.
woman checking her social media accounts on her phone

Consumers are checking their phones over 100 times a day. Everybody is vying for their attention so you need to build a recognizable brand to stand a chance in a saturated marketplace.

Selecting the Appropriate Tools for Social Media ROI Measurement

These tools vary in terms of features, pricing, and the specific social media platforms they support. The “right” tool for your organization depends on several key aspects: your organization’s needs, the platforms you use, and the depth of analytics and reporting required to effectively calculate your social media ROI.

The Ongoing Process of Maximizing Social Media ROI

Remember that maximizing the ROI of Social Media is an ongoing process. It requires continual adjustments to your strategies based on data-driven insights and changes in your business environment. Enhancing your social media ROI over time is achievable by consistently optimizing your approach and delivering value to your audience.

Klik Digital Agency: Your Social Media Marketing Partner

Klik Digital Agency is positioned to be your social media marketing partner. Whether you need to check your SM ROI, Baltimore lead generation data, or some other aspect of digital marketing analysis, our full-service agency has the expertise and resources to assist you. Get in touch today to explore how to reach your digital marketing goals.

Rafal Reyzer

Rafal Reyzer

Hey there, welcome to my blog! I'm a full-time entrepreneur building two companies, a digital marketer, and a content creator with 10+ years of experience. I started to provide you with great tools and strategies you can use to become a proficient digital marketer and achieve freedom through online creativity. My site is a one-stop shop for digital marketers, and content enthusiasts who want to be independent, earn more money, and create beautiful things. Explore my journey here, and don't miss out on my AI Marketing Mastery online course.