Social Media and Digital Marketing has reached a stage where, as per a Gartner Inc. Report, companies spend close to 8% of their entire marketing budget purely on customer acquisition and engagement through leading social media channels. As per research from EMarketer (, companies across the world are expected to spend over $200 Billion on digital and mobile advertising alone in 2015, which is too large a number not to be accounted for!

Return on Investment from Social Media Activities has been a topic of debate since times immemorial, primarily because of the inability of companies to tie social media goals to business outcomes, lack of tools and analysis, and doubts regarding the reliability of the captured data itself. However, in modern times, it is in fact possible to measure the effectiveness of your social media campaigns, and we’re about to tell you how in a simple step-by-step process that’ll make your life simpler:


What is the end business goal that you are trying to achieve through your social media marketing campaigns? This is often the most difficult part in measuring ROI, because marketers are unable to think of measurable goals and how they can be related to business outcomes. Ideally, a goal would be an action you want your customers to take that you can measure, and ultimately has a monetary value for your organization. Some examples of goals can be:

    • Makes an online purchase
    • Clicks on a website link
    • Signs up on a form
    • Downloads a file

Once the goals are decided, you should use a tool where these can be recorded and values for goal achievement can be set. Google Analytics is a good starting point, which lets you define a goal, set a desired value for goal achievement, and shows comprehensive data regarding which campaigns have been able to achieve your goals to what extent.


Tracking social media ROI is an end-to-end exercise; you have to be prepared right from when you prepare your campaigns. Your campaigns, across platforms, should have a call to action towards the goals set in the previous step. The next step is to be able to track the results achieved from different campaigns, which can be done easily through a Google Analytics tracking URL. An example of a Google Analytics generated URL for tracking from Facebook would look like:


This step should be followed for campaigns across social media channels to make the results attributable – Google Analytics backend will be able to track the source medium through this custom URLs.

First timers should get comfortable with URL based tracking through Google Analytics, but advanced tools such as Hootsuite, Buffer, KISSmetrics, which can help in tracking campaigns as well as posting across various social media channels such as Facebook, Twitter, Instagram, etc.


Now that we have assigned tracking URLs to each of our campaigns, the next step would be to assign a monetary value to each conversion. Moving back to step 1, you may remember that we set measurable goals for our marketing efforts. We would now need to analyze how many of these goal achievements actually lead to conversions i.e. a prospect becoming a customer. In addition to that, you would also need to be aware of the average lifetime value of a customer, which means how much does an average person spend on your website once he becomes a customer – this can be done on the basis of industry trends or historical information. Once you have this data, you can calculate the actual value of each result as explained in the following example: –

Let’s assume that customer filling information into a form is our chosen goal, and on an average every 1 out of 5 people who fills the form becomes a customer, and the average lifetime value of a customer is Rs. 10,000; then:

Value Per Goal Achievement= Average Lifetime ValueConversions

The value in this case becomes 10,000 divided by 5, or Rs. 2000.

The next step would be the calculation of value attained from from each platform. For example, if Facebook generated 10 entries to the form and Twitter generated 5, then the values generated from these platforms are: –

Value from Platform=Conversions × Value per Goal Achievement

Therefore the value generated from Facebook becomes Rs. 20,000 and Twitter becomes Rs. 10,000. And the total benefits achieved from social media activities come to Rs. 30,000.


This is an easy part, where you need to calculate the costs for creating and running all your campaigns. Be careful to include all related costs and split them as per platforms so that ROI can also be calculated down to a platform specific level. Some of the basic cost headers could be as follows: –

    • Ad Spend: Money spent directly on Google, Facebook or Twitter for promoting your posts.
    • Agency Costs: Money paid to external agencies if being used to create creative, landing pages, campaigns, etc.
    • Tool Costs: Money spent on external tools, if being used, for example KISSmetrics or Hootsuite subscriptions.
    • Man Hours: Cost per resource per hour, and the number of hours spent in related marketing activities.

This will allow you to arrive at an overall spend, as well as costs split according to platforms.


And we have arrived at the final part where you get to finally see how effective your campaigns have actually been! Upon ROI calculation, efforts must be made to make changes to spend or campaigns on media that are outperforming the others to get best results. The formula for calculating ROI is: –

Return On Investment (%)= Total Benefits-Overall SpendOverall Spend × 100

These easy steps will help you check how effective your campaigns and platforms have been, and modify your strategy accordingly. It must also be kept in mind that this is a very basic method of calculation, and can be made easier through additional tools, such as marketing cloud suites by Adobe and

While these techniques are quite effective for measuring success of goal based campaigns, additional efforts should also be made to study the branding and engagement benefits provided by social media channels, by translating these into measurable goals such as sales and conversions.