How to Measure social media ROI(Return on Investment) ?

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Corporate spending on social media campaigns is expected to double in the next four years, but many marketers don’t know what they’re getting for their dollar. When Audi ran its first Super Bowl ad featuring Twitter hashtags in 2011, it had no idea how the increased engagement from its Facebook fans translated into tons of cars One report found that Fortune 50 percent of 1000 companies use their social CRM.

Initially, social media influence measurement focused on easily observable numbers such as the number of Facebook “likes” and weekly Twitter tweets. These were not always associated with sales or commercial success, so researchers began to dig deeper. Finding social media value is no easy task. Some marketing experts compare social media to a telephone: How do you measure the ROI of all calls? Josh Bernoff, acclaimed digital marketing expert at Forrester Research, looks at the short- and long-term benefits of social media in four categories:

  1. Short-term economic benefits, such as increased revenues or decreased costs. On the revenue side, when added ratings and reviews to its site, sales increased 26 percent within six months. National Instruments, manufacturers of cutting-edge industrial technology products in the value segment, found that its users answered 46 per cent of other users’ questions, saving NI specifically $10 per call in service charges and upgraded AT&T online community in a month telephone customer support and protected 16 percent of the company.
  2.  All temporary digital gains. When Swanson Health Products improved the visibility of its product reviews, they became accessible to search engines, and traffic to its product pages increased by 163 percent Internet video, communities, blogs, and Twitter can similarly enhance search performance.
  3. Long-term brand lift. Social media can improve long-term brand performance metrics. When P&G created a Facebook page in support of ski jumper Lindsey Vann, a petition to make ski jumping an Olympic sport asked for 40,000 signatures. Surveys of participating Facebook users showed an 8 percent to 11 percent increase in brand likes and intent to buy.
  4.  Long-term risk avoidance. Solving a problem can cost a company millions of dollars over time. It’s best to avoid or prevent a problem before it damages the brand. Companies like McDonald’s and AT&T have customer care teams that monitor tweets about their products or services to prevent any suspected problems in the bud. Forrester social media analyst Zach Hofer-Shall believes mining requires strategies actionable and measurable information from social media as follows.

 (1) The right people to interpret the data,

(2) A business purpose to drive strategy,

(3) The best social listening platform for achieving goals.

(4) A formalized process for analyzing data and taking action.

The easiest way to create and measure social media’s payoff is to include a contest, sweepstake, or promotion. Silicon Valley ad agency Wildfire created a promotion for Jamba Juice where the value of a “lucky coupon” was revealed only in-store. Tens of thousands of customers entered. The promotion was successful, but social media results can still be unpredictable.

V. Kumar and his colleagues suggest a seven-step process to social media success with several helpful indices that could be developed for each step:

1. Monitor the conversations.

2. Identify influential individuals.

3. Identify the factors they share.

4. Locate potential influencers who have relevant interests.

5. Recruit those influencers.

6. Incentivize them to spread positive word of mouth.

7. Reap the rewards.

Research has also shown that our use of media differs in significant ways. People tend to be more positive in one-way communications (such as blogs and Twitter) than in two-way forums where they share and discuss brand or product experiences with others.


Measuring social media ROI is a multi-faceted process that requires a strategic approach and an ambitious eye for both quantitative and qualitative metrics. By defining clear objectives, tracking key metrics, assigning goals, and calculating ROI, companies can gain valuable insight into the effectiveness of their social media efforts Analytics tools implementation, continuous strategic analysis, and refinement of data-driven strategies are essential to optimizing ROI. However, it’s important to note that social media ROI isn’t just about statistics; Qualitative data such as sentiment analysis and brand perception also play an important role. In-depth analysis that includes both quantitative and qualitative data enables businesses to make informed decisions and fine-tune their social media strategies for maximum impact and profitability.

Sources-Marketing Management 15th Edition by Philip Kotler

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