How To Measure Social Media Marketing ROI

A woman measuring social media marketing ROI at her desk with a laptop and a credit card.

Prior to the outbreak of COVID-19, experts attributed over $36 billion dollars in sales to various social media strategies. Due to lockdowns and the rise of eCommerce in 2020, two things changed drastically.

First, existing social media users spent more time on social media. And second, all the leading social channels received an influx in monthly users.

As a result, social media and social commerce strategies are more important than ever, especially for eCommerce and B2B tech platforms.

Why Social Media Strategy is Important for Businesses

It’s easy to see why social media marketing is so critical for doing business during a global pandemic. But the reality is that doing business on social media is far more likely to grow than shrink as the world transitions into a post-COVID society.

More importantly, social media is a low-cost way to engage customers online. Here are some of the leading reasons why your business needs a good social media strategy.

Viral Word of Mouth

Local businesses understand the importance of word-of-mouth marketing. Today, word of mouth is digital.

Consumers engage online with one another and publicly ask for product or service recommendations. They also like to show off a purchase that they are proud of. Brands that harness this digital word of mouth can greatly enhance their marketing efforts.

Social Media is Free

While managing a robust social media strategy does take time and energy, creating company pages and posts is completely free. Many critical tasks associated with promoting a brand on social media can be done by business owners, assistants, and internal teams.

Connection with Audience

Being present online for followers, fans, customers, and prospects allows individuals to connect with your brand in a more personal way. There is less pressure to sell in every post. In fact, the brands that do social media best focus less on selling and more on connecting with their audience online.

Paid Ad Options with Audience Targeting

Pay-per-click (PPC) advertising isn’t just an option for search engine marketing. Today, all the leading social channels provide their own digital ad exchange and analytics interface. These tools allow you to reach nuanced audiences and even retarget them to increase your sales and fanbase.

Access to Influencer and Brand Ambassadors

Influencers and brand ambassadors are generating significant returns for the brands that they love. Experienced influencer marketers are experiencing ten times ROI (and more) through product seeding, ambassador programs, and influencer communities.

Top-performing influencers are authentic and non-branded. Consumers trust them as both industry experts and objective, third-party opinions about a brand’s products and services.

By maintaining a strong social media presence, brands can harness the power of influencers and ambassadors to exponentially increase their brand awareness and sales.

Top Performing Social Media Channels for Businesses in 2021


Active Users: 2.8 billion

Ideal Demographic: Consumers and professionals 18-60 years old

Facebook is the clear front-runner of all the social media channels. It also owns Instagram and maintains a full suite of business services for brands that wish to take advantage of them.

Not only does Facebook lead in the number of monthly users, but it also has one of the widest audiences (second only to YouTube). Among its array of free and paid features are:

  • PPC and ad analytics (for both Facebook and Instagram)
  • Business accounts
  • Long and short written posts
  • Images and video
  • Ephemeral stories (similar to Instagram)
  • Live
  • Groups
  • In-app shopping


Active Users: 2 billion

Ideal Demographic: Consumers and professionals 13-65 years old

There is no video platform that comes close to YouTube. It also commands the widest audience, from 13 to 65 years of age. As a horizontal, long-form video platform, users flock to YouTube to access the following types of video content:

  • Entertainment
  • Music
  • Tutorials
  • Reviews
  • Advertising
  • Commercials

Paid advertisers can partner with Google (Google owns YouTube) to target audiences and place ads on YouTube.


Active Users: 1 billion

Ideal Demographic: Consumers 18-45 years old

Instagram is one of the leading social platforms for retail, DTC brands, and influencer marketing. The wealth of compelling visual content can inspire consumers to create wish lists and follow the recommendations of their favorite influencers.

Instagram also offers the following:

  • 1:1 ratio image posts
  • Ephemeral stories
  • Video reels (vertical)
  • Live
  • In-app shopping
  • Shoppable image ads


Active Users: 1 billion

Ideal Demographic: Consumers 13-30 years old

TikTok is the fastest growing platform in the history of social media. In 2018, TikTok raised eyebrows by reaching 100 million users in just two years. Today, it has over 1 billion monthly users worldwide.

TikTok is strictly a short-form, vertical video platform. And because the platform is relatively new (with a predominantly younger audience), many business opportunities are under development. But brands can create accounts, push out their own content, and partner with TikTok influencers.


Active Users: 450 million

Ideal Demographic: Consumers 18-45 years old

Pinterest illustrates the virtual vision board model. Users can post and pin images of any dimension. Brands can also create lifestyle posts with digital price tags for online shoppers. Of the visual social channels listed here, Pinterest does the best job of driving traffic to your website.


Active Users: 330 million

Ideal Demographic: Consumers and professionals 35-65 years old

Twitter is our first channel on the list to cater to an older demographic. It also encourages professional users to engage on subject matter related economics, business, politics, and more. Like Pinterest, Twitter is great for driving web traffic. The main difference is that Twitter is less visual and more focused on short-form written content.


Active Users: 260 million

Ideal Demographic: Professionals 40 years and older

LinkedIn is a prime social channel for B2B and professional services brands. Users can do some of the same things that they do on Facebook, including:

  • PPC advertising
  • Long and short written content
  • Business or individual profiles
  • Image and video content

How to Determine Which Social Media Channel is Best for Your Business

The most important consideration when launching your social media strategy is knowing where your target audience is. Using the information you already have about your ideal customer, match their demographics to the social channel that targets them.

You should also think about what kind of content will feature your brand best. For example, if you’re a fashion eCommerce brand, then you will need a place where you can showcase creative visual content, such as Instagram, Facebook, and Pinterest.

Lastly, you should test your strategy on a couple different channels and compare results. Before long, you’ll get a good idea of which channels will offer the best returns. Furthermore, you can master those channels before launching on new channels that will complement your primary social media presence.

Organic vs Paid Social Media for Business

Organic social media refers to all non-paid efforts you invest into your social media presence. These efforts include posting schedules, content creation, incentivizing user-generated content, and more.

Paid social media is any investment you make toward sponsored content, such as PPC ads and influencer posts.

Each – organic and paid – have their advantages, which is why brands should include both to some degree into their marketing mix.

The advantages of organic overpaid social media include:

  • It’s free
  • More authentic
  • Unsolicited user-generated content can drive algorithms to feature the content in more newsfeeds at no additional cost
  • Deepened relationships with existing fans/customers

But there are also clear advantages of paid over organic social media:

  • Reaches new, targeted audiences
  • Can drive traffic and sales more effectively
  • Increase the impact of viral organic content

How do you measure success with social media?

Success always depends on your marketing goals. Every brand wants to increase sales on social media. But to do that, marketers need to understand how social media marketing works and what drives customers to use social media to inform their purchasing decisions.

Tracking the Success of Paid vs Organic Social Media

Whether using organic or paid social strategies, you will need to track key metrics to know whether or not your strategy is working. That said, you should differentiate your organic marketing goals from your paid goals, knowing that there may be a little bit of overlap between the two.

Paid Social Media Tracking and Reporting

The more metrics that you track in your social media and website, the better you will be able to see if your campaign is working. In most paid campaigns, your goal is conversions, such as sales or subscriptions. But you should track more than the number of conversions if you want to improve your paid strategy.

Which metrics should you track for paid social media?

The metrics that you track are essentially your paid social KPIs. Using a tool like Google Analytics’ Tag Manager, you can map the customer journey from a social media ad click to the final purchase. If you’re utilizing shoppable ads such as Instagram Shopping to track your campaign, you will have all the metrics you need within the social media platform.

Metrics that you should follow closely during a paid social campaign:

  • Views/Impressions
  • Clicks and Click-through rates (CTRs)
  • Conversions/Sales

Based on your final sales numbers, you can establish how many of each metric above results in a sale. For example, if your ad campaign delivered the following results…

  • $1,000 in sales
  • 100,000 impressions
  • 5,000 clicks

…then you know that it currently takes 20 views to generate a click and 5 clicks to generate a sale. You can then attach value (expressed in dollars/cents) to each metric as follows:

  • 1 sale equals $100
  • $100 / 5 clicks = $20 per click
  • $20 / 20 impressions = $1 per impression

If you want to take these metric values a step further, you can use your POS data to identify customer lifetime value (CLV). For each new customer, you can attribute the full value of each customer acquisition to your paid social campaign success.

How to Measure ROI of Paid Social Media

After carefully tracking and evaluating your campaign KPIs as described above, you can calculate your paid social ROI.

For costs, be sure to include both the cost of the social media ad platform, as well as the cost of labor (if you hired someone to manage your campaign). Input the numbers in your formula below.

(Revenue – Cost) / Cost = Paid Social Media ROI

It’s typical to express your ROI in a percentage for clarity’s sake. Once you’ve established a baseline for your paid ROI, you can refine your paid social media strategy to increase returns.

Organic Social Media Tracking and Reporting

For most brands, organic social media strategy is less about direct sales and more about brand awareness and user-generated content.

Which metrics should you track for organic social media?

To measure how well you are connecting with members of your audience online, you can start with tracking the following metrics:

  • Engagements
    • Likes
    • Comments
    • Shares
  • Tags
  • Branded hashtags
  • Views/Impressions
  • Clicks and CTRs

Rather than measuring each metric above against your sales, it can be more insightful to keep

tabs on the number of qualified leads you acquire through your organic strategy.

How to Measure ROI of Organic Social Media

You can evaluate each qualified lead in a similar way to how you attached dollar/cent values to specific metrics within your paid social campaigns.

In other words, instead of a number of clicks that results in a sale, you can track how many leads it takes to get a paying customer. Incorporating the CLV can also help you input the total value of your organic strategy.

(Value – Cost) / Cost = Organic Social Media ROI

With organic social media, your costs should be much lower since you aren’t paying for ad placement. But you should still take labor into account, such as the cost of your time or the cost of a social media manager.

Conclusion: Scale your social media strategies with the right reporting and drive ROI.

Social media success requires brands to identify their marketing goals, break those goals down into KPIs, monitor those KPIs, and then refine their strategy over time. Great social media marketing is all about connecting with audiences, uncovering what works, and then replicating that success for better results.

Special thanks to our friends at for their insights on this topic.
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Transforming CX in a Post-COVID World with Carrie Lemelin
Transforming customer experience in a post-COVID world through Carrie Lemelin.

Transforming CX in a Post-COVID World with Carrie Lemelin

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