Social Media


Most business owners are convinced that marketing through social media is worth business time and effort because of its visibility and immediacy. However, majority of business companies find it difficult to calculate its effectiveness in marketing. Many business managers and owners have accepted that the greatest challenge they are facing today is calculating the rate of return (ROI) of social media campaigns (Blanchard, 2011). Best measurement practices are still evolving, and although brands and even smaller companies commit large percentages of their marketing budgets to social media sites, many are still doubtful about its ROI and value. There are numerous methods that companies can use to estimate the ROI of social media marketing.

There are three main steps that companies must follow in calculating the returns on social media marketing. The first step is defining the social media goal. Goals are very important in a majority of business activities because they act as a guide towards achievement (Pullen, 2011). After stating the goals, the company should define the expected social media return. This is usually deduced from the social media goals. Finally, the company must then estimate the amount of budget required to drive the company towards attaining the set goals.

The first method that can be used to calculate ROI of social media is measuring the return on sales. Sales are very important in determining whether efforts made by a company are beneficial to a business. The first step in this process is defining the social media goal, which is increasing company’s sales. This is then followed by defining the return as the sales’ value attributed to the campaign on social media (Holmboe, 2011). The hard-dollar value of this goal is the amount of dollars received from the sales. After accomplishing the first three steps, the company can then attribute the sales to the campaign on social media. This can be accomplished by following the movement of clients to ascertain how they entered the companies supply chain. Comparing the company’s sales value before and after the social media campaign is also important in attributing sales to social media campaigns. The amount of sales attributed to the social media campaign is the estimated ROI of social media campaigns.

The second method that can be used to calculate ROI of social media is using consumer insights. The campaign should aim to generate high-quality consumer insights (Holmboe, 2011). The value of positive consumer insights to a business is undisputable because it can bring in more customers to the business. The company can then count all positive consumer insights based on what users are saying to the company or each other on social media platforms within a given period. The return on consumer insights can be estimated using the positive counts. The estimated return from consumer insights and investment over the specified period can then be used to estimate the ROI.

Technology can also be used to calculate the ROI of social media campaigns. An example of the tool that can be used is Custom Social Media Reports provided by Google Analytics (Chuck, 2013). Google analytics plays a vital role in tracking the number of visitors to a given website or even Facebook pages of a company. This technological tool can be used to determine the effectiveness of social media campaigns by counting the number of individuals visiting a company at a given period of time.

There are many ways of estimating the ROI of social media campaigns. These include the return on sales, consumer insights and use of technological analytical tools. The vital point to note is that social media ROI highly depends on the goals of the social media campaign.





Blanchard, O. (2011). Social media ROI: Managing and measuring social media efforts in your organization. Indianapolis, IN: Que.

Chuck, P. (November 24, 2013). Social media ROI: 11 free tools for measuring social media success. Retrieved from ROI-11-FREE-Tools-for-Measuring-Social-Media-Success

Holmboe, D. (October 12, 2011). How to estimate your social media return on investment. Retrieved from media-return-on-investment/

Pullen, J., P. (June 01, 2011). How to measure your return on your social media investment. Retrieved from




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