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How to Prove (and Improve!) Your Social Media ROI

Learn how to calculate your social media ROI — aka the return on investment from your social media activities and expenses.

Laura Wong September 21, 2023
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As a social media manager, one of my recurring nightmares is being pulled into a meeting with executives and asked to prove our social media ROI.

This scenario haunts me, and not because I don’t believe in the value of social. Proving ROI is a multi-step process with several variables, inputs and considerations. Still, I know that social does make an impact.

I’m not alone on this, either. 96% of marketers agree that social media delivers positive returns. And now, it’s time to prove it.

In this post, we’ll walk you through the steps to calculate and improve your social media ROI (including a list of our go-to tools). Nightmares begone!

Free downloadable guide: Discover 6 simple steps to calculating your social media ad campaign ROI.

What is social media ROI (and why does it matter)?

ROI stands for return on investment. For our purposes, social media ROI means the business value returned from social media marketing and advertising.

In other words, social media ROI measures the results of social media marketing compared to its costs.

It’s a way to assess whether your social media strategy is generating a positive outcome for your financial or strategic goals.

Here’s a simple formula to calculate social media ROI:

Social media ROI = ((Value generated from social media – Costs of social media investment) / Costs) * 100

Here’s what the components of the formula mean:

  1. Value generated from social media. The definition of value varies from business to business. Value can include increased sales, leads, conversions, or cost savings due to effective social media engagement. We expand on this more below.
  2. Costs of social media investment. This means all costs associated with executing your social media strategy. It can include advertising budgets, content creation costs, employee salaries, software & tool subscriptions, and other resources related to social media activities.

The result of the formula is usually expressed as a percentage.

Any ROI percentage greater than 0 means that your social media efforts have generated more value than the resources you invested. In contrast, a negative ROI means you invested more than you made back (aka you lost money).

Measuring social media ROI empowers marketers to prove their efforts’ value. By calculating ROI, you can determine what’s working and what’s not and attribute real business results to social media.

And if you want to earn more budget and resources to scale up your social media strategy? You’ll need to communicate these results to key stakeholders and executives. If you want to hang onto your budget, you better be able to prove why you need it.

How to calculate ROI on social media in 5 steps

How you calculate ROI varies from business to business. Measuring ROI depends on which objectives matter most to your company. These priorities might include brand awareness, revenue, or customer satisfaction.

Our 2023 Social Media Trends research found that marketing practitioners and leadership perceive the value of social through different metrics:

Hootsuite's 2023 Social Trends report shows how marketing practitioners and leadership perceive social ROI differently. C-level execs and VPs value sales/revenue or Time on Page, while social practitioners consider impressions/views valuable.

Source: 2023 Social Media Trends

This perception mismatch explains why the formula above uses value, rather than revenue or profit, as the starting point. It allows for combining many metrics to find the total value.

Here’s how to measure ROI with social media.

Step 1: Define clear social & business objectives

The first step to calculating ROI is understanding your business as a whole. What are the main objectives, and how can social contribute to those goals?

There are various ways your social media investment can create value, such as:

  • Driving business conversions (including lead generation, newsletter signups, and sales)
  • Growing brand awareness
  • Building a loyal audience
  • Increasing positive brand sentiment
  • Discovering & mitigating brand crises
  • Resolving customer service issues
  • Improving employee pride and job satisfaction
  • Creating relationships with partners and suppliers

Per the list above, it’s not just about generating direct revenue. Social can also help with retention, brand awareness, and partners & suppliers.

That said, you shouldn’t expect your social media strategy to achieve all of the above. Focus on objectives that are most likely to contribute to your business and department goals.

Step 2: Track metrics that align with your objectives

Now that you’ve determined your social media objectives, the next step is to track their performance.

Many social media metrics can give you insights into how your strategy is performing. But, choosing the right metrics is essential to fully understanding your social ROI.

Metrics you can track to prove ROI include:

  • Reach
  • Engagement
  • Site visits
  • Leads generated
  • Form submissions
  • Sentiment
  • Newsletter subscriptions
  • Signups
  • Conversions
  • Sales/revenue generated

To decide which metrics to use, consider the following questions:

  1. What action(s) will the audience most likely take after seeing your social content?
  2. Does this metric reflect my business objectives?
  3. Does it help me make decisions (what to do more of, what to do less of, etc.)?
  4. Is it possible to measure it accurately and consistently?

Check your metrics regularly. Ideally, you should get automated reports sent to your inbox so you don’t have to remember to pull them yourself.

Tip: When calculating your returns, choose a reporting period based on your sales cycle. LinkedIn research found that 77% of marketers measured results within the first month of a campaign, even though the average B2B sales cycle is two months.

Sales cycles will vary from business to business. Connect with your sales department to know the appropriate timeframe for reporting social media ROI.

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Step 3: Calculate your social media costs

Once you’ve measured the value created based on your chosen metrics, you can move on to calculating the cost side of the equation.

Social media costs should include all expenses required to create and publish content. These expenses may include:

  • Tools and subscriptions for social media management
  • Advertising campaign budgets
  • Content creation costs, including tools, assets, licenses, and fees for working with creators or freelancers
  • The ongoing costs for your social media team (salaries, training, etc.)
  • Agencies and consultants (if applicable)

Before adding up your costs, you should know the returns you’re looking for. This may be based on a specific time period, campaign, post format, or otherwise. This will help you narrow down which costs to include in your total.

Step 4: Calculate your ROI

You should be ready to input your total value and costs into the formula above to calculate your ROI.

If you’re not a fan of spreadsheets or manual calculations, we’ve built this free social media ROI calculator.

Remember, a positive ROI means you profited from your investment, while a negative ROI percentage means you spent more than you made.

Step 5: Create an ROI report that shows the impact of social

Now that you know your ROI, it’s time to share those results. Your report should show stakeholders how your social media efforts impact the bottom line.

Here are some ways to make your report stand out:

  • Use a report template
  • Use plain language (avoid jargon and acronyms)
  • Tie social results back to relevant business objectives
  • Use KPIs to track short-term progress
  • Call out assumptions and limitations, and be clear about what you can (and cannot) measure
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How to improve your social media ROI

Analyze and iterate

Social media is constantly changing — if it’s not the algorithm, it’s your audience’s preferences. The content, strategies, and channels that work today might fall flat tomorrow. You need to update and adapt your strategy over time.

Knowing how to understand and extract insights from your social media analytics is a powerful skill for marketers. Hootsuite Advanced Analytics helps marketers flex that skill.

The Hootsuite Advanced Analytics dashboard

Advanced Analytics uses powerful integrations to help you track conversion and business goals. It also includes recommendations, easy-to-share reports, top-performing posts, and suggestions for improvement.

Request a Demo

Clear and actionable reports bring value to your team and stakeholders. Even better? Using the insights to create new iterations of your social strategy. Your ability to adapt will lead to increased ROI over time.

Test and optimize

No matter the strength of your social media skills, you can never predict how your audience will respond. All audiences are different, but experimentation is the best way to mitigate this.

You can run A/B tests on social media to test different factors and optimize your content based on the outcomes. You can run experiments through organic social accounts and paid ad campaigns.

For example, we ran this experiment to test whether Instagram carousels perform better than Reels. After three weeks, we found carousels earned better engagement and reach!

Check out all our social media experiments here.

There are many factors you can test, including:

Testing — and reviewing your social media analytics — helps you learn what types of content actually resonate with your followers. Based on those insights, you can scale up that content or ad and increase your social media ROI.

Track your competitors

Are you looking for ideas on what to test or how to gauge the success of your metrics? It might be time to do some competitive analysis!

I’m sure I’m not the only marketer who’s spent hours pulling together average engagement and clickthrough rates, only to wonder: “How do I know if these numbers are actually good?”

In those cases, benchmarks are my go-to resource.

Hootsuite has built-in industry benchmarks. You can compare your own post performances side-by-side with averages from other companies in your industry.

Want to compare your results with your direct competition? Competitor benchmarks are even better than industry benchmarks. Here’s how to use competitor benchmarks in Hootsuite.

7 useful social media ROI tools

Now that you know the theory behind measuring social ROI, here are some tools to make the process easier.

1. Hootsuite Social Advertising

Hootsuite Social Advertising is a cross-platform dashboard for managing paid and organic campaigns. It allows you to analyze the ROI of ads and organic content in one place.

When you can review your entire social strategy in one place, you can look at the big picture. These insights help you maximize your resources to improve social ROI.

2. Google Analytics

This free analytics tool from Google is a must-have. It helps you track website traffic, conversions, and signups from social media campaigns.

Google Analytics enables you to go beyond reach and engagement. You can even track the value of your social campaigns over time via conversion funnels.

Google Analytics allows digital marketers to access campaign data without relying on cookies.

3. UTM parameters

UTM parameters are short text codes within URLs. They enable marketers to attribute and track website visitors from traffic sources like social media.

UTM parameters feed information to analytics tools like Google Analytics, Adobe Analytics, and Hotjar. From there, they can help you measure social media success. UTMs allow you to review performance from a high level or get into granular details.

You can manually add UTM parameters to your link or use link settings in Hootsuite.

4. Tracking pixels & conversions APIs

If you’re running social media ad campaigns, tracking pixels are essential for measuring the return on your ad spend.

Pixels allow you to track visitors that come from social ads and their actions (such as purchases). They also enable you to retarget and optimize your ad targeting.

These days, tracking pixels are less effective, thanks to iOS14.5 and ongoing changes with first- and third-party cookies. Platforms like Facebook are trying to get around this, though. They’ve introduced a Conversions API to collect information directly from your servers.

Read our complete guides about the Meta Pixel and TikTok Pixel.

5. Hootsuite Advanced Analytics

Hootsuite Advanced Analytics is our most powerful analytics solution yet. It measures social media marketing ROI across paid, owned, and earned social channels.

Advanced Analytics connects to your existing performance measurement systems. That means integrating social data with the rest of your business metrics is way easier.

Plus, its makes producing reports easy and delivers plain-language recommendations help you optimize your social strategy and improve social ROI.

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6. Social media ROI calculator

We’ve built this free calculator to help you calculate your social media ROI. You’ll need to know several inputs, such as website visits, website conversion rate, your sales team’s close rate, customer lifetime value, and costs.

The calculator will give you a public link to share your social media ROI with colleagues and stakeholders.

7. Hootsuite Social Listening

Social listening helps you tap into what people are saying about your brand, competitors, and industry. You can use it to discover trends, find collaboration opportunities, and dig into customer needs.

Hootsuite has social listening built-in to all plans. It also integrates with listening tools like Talkwalker, Digimind, Meltwater, ReviewTrackers, and Google My Business.

Frequently asked questions about social media ROI

What are some common mistakes businesses make when measuring social media ROI?

Some common mistakes businesses make include measuring vanity metrics, not tying social metrics to business objectives, and only measuring profit instead of the total value generated by social media.

How do you make sure you’re tracking the right metrics?

When measuring ROI, you should determine your business objectives and choose the social metrics most likely to contribute to these objectives. These metrics should be actionable and easy to measure. For example, if your goal is to build an audience, your social metrics should be follower growth and email subscribers referred via social platforms.

How do you know if you have a “good” ROI?

A good return on investment is any number above zero. A positive ROI means your investments generated more value than your costs.

Use Hootsuite Advanced Analytics and get plain-language reports of your social data to see exactly what’s driving results for your business—and where you can boost your social media ROI.

Request a Demo

Prove and improve social ROI with Hootsuite Advanced Analytics. Track conversions, conversations, and performance across all channels.

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By Laura Wong

Laura Wong is a Canadian social media strategist based in Amsterdam. She is the founder of, an online platform that helps anyone land their dream social media job. Besides social media, Laura is passionate about travel, photography, entrepreneurship, and finding the best bubble tea in every city she visits.

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