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  • Writer's pictureJanese Maricelli

Social Media Marketing: Is the ROI worth it?

Social Media Marketing: Is the ROI worth it?

Investment in social media marketing is becoming more popular than ever as businesses seek to attract consumers’ attention. In fact, according to the August 2018 edition of the CMO Survey, spending on social media has increased more in the last year than any previously surveyed year and investments into social media are projected to continue to increase by 66 percent over the next five years.

However, despite the rapid growth of social media marketing, businesses are struggling to measure an actual return on investment.

What is social media marketing?

Social media marketing is the process of delivering tailored content through social media platforms in order to drive user engagement.

For businesses who are seeking to develop a social media marketing strategy, the term “engagement” can include anything from follower count to clicks, downloads and subscriptions. It’s this ambiguity that often makes it difficult for businesses to measure a true ROI on their social media investments.

Set your goals

To determine if investing in a social media marketing strategy is worth it for your business, you first need to define your goals. For example, are you looking to increase your number of followers? Drive web traffic? Sell more products? Every business has their own unique goals, but ultimately, effectively attracting the right consumer is what leads to achieving measurable returns. Examples of goals that can be measured by meaningful consumer engagement include increases in:

  • Brand awareness through direct engagement (e.g. following, sharing and/or commenting)

  • Email/newsletter subscriptions

  • Downloads (e.g. e-books, webinars, podcasts, etc.)

  • Sales

Define your metrics

According to a 2017 survey by, more than half of online marketers believe that social media has helped them increase brand awareness, internet traffic and sales. But how do they know? And is it possible to create content that will drive consumer action?

There are generally two different types of metrics used to calculate consumer interaction. The first, known as vanity metrics, measure things like page views, follower count and other numbers that might look good on paper, but don’t necessarily affect your bottom-line. Engagement metrics, on the other hand, help measure users’ actual engagement with your online presence though things like clicks and subscriptions, as well as your ability to attract and keep customers.

The survey cited the most important measurable social media metrics for businesses as:

  • Engagement: the effectiveness of posts based on the number of likes, comments, shares and clicks

  • Conversion Rates: the percentage of users who take a desired action (e.g. signing up for a newsletter or downloading an e-book)

  • Click-through rate: the ratio of users who have clicked on a specific link vs. users who view a page, email or advertisement

  • Audience growth: the increase or decrease in a brand’s following on social media

  • Impressions: the number of times content is seen

track your ROI on social media

Track your success

Now that you have set your goals and know what you want to measure, how do you know if your social media strategy is working?

Tools like Google Analytics and social media platform trackers like Facebook Insights help measure the performance of your online presence as well as user interaction.

Keep in mind that not every social media user is your target audience. The number of views won’t matter if you aren’t getting in front of the right consumer. Producing targeted content, such as blogs, newsletters and ads is what will drive relevant traffic and growth.

In addition to tracking consumer movement to, from and through your social media platforms and websites, analytic tools provide “demographic and interests” information that allow you to analyze information about the age and gender of your users, along with the interests they express through their online travel and purchasing activities.

Determine your expenses

Finally, you need to calculate actual ROI. To calculate social media marketing ROI, use the following formula:

(Earnings - Cost) x 100 / Cost

When calculating your costs, be sure to include:

  • Man hours: Time is money! Add up the actual time that has gone into each social media campaign.

  • Social media tools: Social media platforms are generally free, but social media management software or applications often come with fees.

  • Ad costs: In this pay-to-play market, don’t forget to add promoted Tweets, Facebook and Instagram posts.


Social media can be a powerful marketing tool for businesses seeking to increase consumer interaction, but it can often be overwhelming and time consuming. More and more, businesses are increasingly turning to outside agencies to effectively manage their marketing and social media needs.

If you’re interested in creating a more meaningful and engaged web presence, let JanMar Agency help! From consulting to content to social media, JanMar Agency provides a full-service marketing experience to help your business thrive.

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