Digital Marketing Glossary

Social Media ROI

What Is Social Media ROI?

Determining return on investment (ROI) on organic social media is one of modern marketers' most challenging tasks. Despite metrics like follower growth rate being relatively easy to track, calculating ROI requires more attention to tie social performance to revenue metrics properly. There are myriad avenues for purchasing a product or service, from navigating to a link-in-bio and landing directly on an e-commerce store via ads to visiting a retail store or searching for a product on a shopping search engine. Because of the multi-touch nature of digital shopping, accurately determining return is so tricky — every interaction with a brand influences purchase decisions. Yet typically only the last touch can be tied to revenue. In this article, we’ll cover the top ways to define and measure social media’s impact on your business goals and best practices for tracking social media ROI.

How To Set Proper Goals Based on Metrics

Measuring social media ROI is somewhat subjective in that ROI will look different depending on your business goals and the company’s growth stage. For established brands, sales are likely the most important metric. For new brands, however, reach may be more important. Brands must take a targeted approach — attempting to optimize too many metrics simultaneously will fail to optimize any. 

A best practice is to set benchmarks for your secondary metrics while prioritizing your primary metrics. However, you should also keep in mind that growth will be correlated for some metrics while others will be inversely correlated. Reach and engagement will likely grow together with your number of followers. The opposite is true of followers and engagement rate — as your audience grows, most brands see a decline in engagement. 

In today’s digital-first world, social media often acts as a storefront for consumers. As such, social media goals should directly ladder up to marketing and company-wide goals. 

Ask: What is the goal of social media for my business? Is it the same across all handles and channels? If not, ensure that you’re setting specific goals for each handle and medium. 

Here are some standard metrics to track:

Reach: Reach is best for new and growing brands or brands looking to expand into new markets or buyer personas. Reach is defined as the total number of unique accounts that have seen your piece of content.

Conversions/link clicks: Conversion metrics are best for established brands hoping to drive sales from social media. 

Engagement: Engagement Rate is best for brands looking to build a strong community. It’s highly linked to brand loyalty. Engagement rate is calculated as likes and comments divided by total followers, multiplied by 100.

Followers: Followers are best for brands hoping to grow their audience and share of voice. As with engagement, followers are closely related to brand loyalty. 

Effectiveness rate: A custom metric created by Dash Hudson that marries reach, engagement and other metrics. The effectiveness rate is designed to be a more holistic measure to determine overall success.

How To Measure Social Media ROI

There are a few steps to effectively measuring your social media ROI:

1. Determine goals and success criteria

Your business goals will determine which metrics to prioritize. These are a few of the most common business goals we see associated with social media:

  • Increase brand awareness
  • Change or enhance brand perception
  • Build brand loyalty and a community around your brand
  • Communicate new products, promotions and more with your audience
  • Drive sales and conversions

2. Establish tracking

Ensure that you’re able to track your metrics in real-time. Google Analytics is the most comprehensive tool in determining acquisition and monitoring buying funnels. Other new tools on the market, such as Adobe Web Analytics have similar functionality. Google Analytics recently launched tools that track social media ROI using last touch monitoring and measure the impact of all touchpoints. It helps to identify conversion sources and segment content to see if specific posts or channels drive traffic to your website. No tool is perfect, but this is a start toward a stronger understanding of social media's effect on business growth. 

Leveraging a social insights tool can be instrumental in understanding the health of your social channels. These tools aggregate social channel data and calculate custom metrics, which are often more holistic than traditional metrics, on social media channels like Instagram, Facebook, Twitter and Pinterest. 

When evaluating a social media insights platform, here are a few things to consider:

  1. How far back can you see your data? Many platforms will have a limit on accessing historical data. 
  2. What channels does it cover? 
  3. How is the platform accessing data? We recommend only working with Facebook Marketing Partners so you can be sure data is reliable and verified by coming from the API.

Tip: Instead of tracking the number of followers or the number of engagements, focus on percentages. For example, a goal could be: maintain a follower growth rate of 10 percent month over month.

3. Understand how creative is impacting your social goals

Getting granular when it comes to measuring content performance is key. Determine which content is driving high-level results by segmenting content type, style, aesthetic and other key visual elements.

4. Use what you’ve learned to fuel future growth

After every social media audit, do a mini post-mortem. If the previous step is the “what,” this is the “why” and “how.” Did certain content pillars positively impact metrics? Are there content pillars that aren’t performing? Does a type of content perform best? (compare stories versus feed posts and UGC versus branded content). What are the next steps here?

Dash Hudson brands use our content segmentation tool, Boards and visual trend tools like VIQ and Vision to determine which types of content contribute to increasing their key metrics. Dash Hudson’s data-driven suite of comprehensive tracking and measurement tools equips brands with the actionable insights they need to maximize social media ROI — allowing marketers to focus on strategy, instead of hunting down data.

Accurately Track ROI With Dash Hudson

Tracking tools such as Google Analytics can help brands monitor traffic acquisition and identify their most profitable social channels, but bringing on a platform like Dash Hudson, is how brands level up to a solid understanding of which channels and types of content perform for their brand based on key metrics and performance indicators.

Brands should also ensure that they’re taking the time to get granular with their content to identify and understand which creative is impacting topline performance. While tracking social media ROI will never be easy, it’s crucial for digitally-driven marketers and will only become more important as the social landscape continues to diversify and expand.


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Is there a formula that I can use to calculate social media ROI?

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Since ROI is so dependent on your business goals, there’s no singular formula that could encompass what ROI looks like for your brand. Instead, pick a metric and track its growth over time. If sales are your primary focus, compare social media metrics like reach to overall sales growth to get a sense of performance.

How can I show senior leadership ROI when there are no concrete numbers?

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Metrics like swipe-ups, link clicks (in bio), and reach shows your senior leadership that social media drives traffic to your website and that potential buyers see your products. Social media is less conversion-focused than other channels like performance marketing. Instead, prove the value through the brand awareness you’re building.

Is there one social media network that brands typically see more ROI?

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The answer to which social channel to focus your efforts on depends entirely on your brand. For visual first beauty and fashion brands, Instagram has been the historical channel of choice while luxury brands are beginning to see great success on TikTok. For Gen X and Baby Boomer-focused brands, Facebook is the leading platform. Don’t be afraid to experiment—test channel-specific messaging to see what resonates with your audience the most.

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