Is it possible to calculate social media ROI?

Return on investment (ROI) is one of the few genuine financial measures of marketing success and is directly comparable to metrics used by financial investors in respect of business more generally.

Where ROI can be attributed specifically to one or more promotional activities it is a very powerful metric. Unfortunately, the question remains: how can we attribute the outcome of certain activities to the social media activity that preceded it?

Social media ROI is the financial return from all the time, effort, and resources committed to social, and it is best calculated with numerical/monetary amounts. There are no pound signs directly attributable to retweets or likes.

Facebook and Twitter, for example, are potentially an almost zero-pound investment as there is no cost from these networks to create a brand page. However, there are other costs for content creation and resources to manage campaigns. Additional costs will also be incurred if social media advertising is used.

In theory, therefore, social media is low cost and should produce strong returns as a result.

In order to track ROI:

• Identify the monetary investment in social media
• Attach a pounds and pence amount to the social media goals