Social Media for BusinessSocial Media ROI

What’s the ROI on Social Media?

roi on social media stunning strategy pittsburgh

Content marketing, including social media, has been around for more than a decade, yet 68 percent of B2B marketers  and 40 percent of B2C businesses don’t have a documented strategy.

Unfortunately, winging it doesn’t usually produce results in marketing.

Even without a plan, the golden question that’s been asked across industries and blogs is:

What’s the ROI of social media?

Let’s start with what ROI is:

ROI stands for “return on investment.” It’s what a business gets from investing cash into something. ROI is usually measured to understand how spending a proposed amount money is viewed – as an investment or as an expense.

ROI does not mean “immediate sales.” Depending on what metrics you’re measuring, the return from a marketing investment could be more long-term, including increased brand awareness or measuring a customer’s intent to buy.

Here’s a great video explaining how to use ROI as a way to improve your marketing investments.


As the video touches on, calculating the ROI of marketing spend depends on the business process and sales cycle. Particularly with social media, there’s a misunderstanding as to where it fits into your sales cycle, and therefore, how much a business gets in return.

Next, where does social media fit into a sales cycle?

At the top – it’s the same place that your advertising, blogging and other content marketing goes.

sales funnel including social media

Source: Social Media Examiner


So it’s probably not going to generate direct sales organically.

So what can social media marketing do?

Push a lead into your sales funnel – to your website, to your email opt-in.

Which, in turn, gets you the golden ticket of an email address, which, to this day still has one of the highest lead conversion rates out of all the available digital marketing tactics.

Social media marketing also exposes a target customer to your brand and messaging. This helps with brand awareness, especially since it can take seven touches before a conversion happens.

Studies on social  media ROI – so far

Asking for social media ROI and expecting a specific answer is like asking the ROI on a Google search or PPC campaign:

It depends.

It depends on how much you invest, the length of your business’ sales cycle and how well you implement your social media marketing.

The ROI for a paid advertising campaign could be $.01 per click, or $80 per click. It really depends on how well you target and it can take several iterations to figure it out.

The studies that have been done on the ROI on social media marketing look at a huge amount of data across industries, in varying forms of implementation:

  1. Long-term – Increase your followers, increase brand awareness? No, it’s not that simple, especially with ever-changing newsfeed algorithms, but building a solid base of real followers  can give you an attentive audience.
  2. Short term – That long-term brand awareness pays off when it comes time to launch a sale, campaign or contest. Your established fan/follower base on social media, who you’ve been creating value for in the last few months or years, can participate in whatever self-serving marketing efforts you drummed up. Some up-and-coming businesses have seen significant growth in sales from Twitter campaigns alone.
  3. The value of a follower – At some point, attempts were made to generalize the value of a follower or a like on social media. In 2012, Twitter was saying that each follower was worth around $2.50. Now we know that the value of your followers depends on a variety of factors, including the type and cost of the product or service you’re selling.
  4. In B2B industries – The connection between a sales rep’s social media use and converting leads has been made in several studies. One study in Forbes showed that sales people using social media as part of their funnel outsell 78 percent of their peers. In another study, IBM found that a lead developed from social media is seven times more likely to close.


The value of a Facebook like continues to evolve and there are plenty of studies (like this one saying that for every $1 spent on influencer marketing, a business gains $6.50 in return) or this fun tool from Hubspot that acts as a calculator for determining a fan’s worth to you.


At the end of the day, it’s up to a business owner or marketing manager to figure out their own ROI equation. Here’s a great example of how to factor in your advertising spend and time figure into your business goals.

Another option is to hire a strategy social media specialist to help you with it.

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