By Helle Tyllesen

February 17th, 2016

In a world driven by metrics, every marketer is expected to be able to show how their budget is being spent. And as businesses pivot to meet shifting market expectations and opportunities, everyone is expected to be able to demonstrate the return on their investments.

In the past, social media managers were able to produce a number of statistics intended to justify their efforts. Follower count, likes, and retweets were all seen as proof of brand awareness, believed by some to be an acceptable return on marketing investment. After all, the only outlay was on salary for a social media manager.

But the commercialization of social media has forced companies to re-evaluate their approach and expectations.

The social landscape has changed

Floating on the stock market forces businesses to change the way they do things. In the case of Facebook and Twitter, this meant finding ways to generate a profit to appease their shareholders.

And armed with valuable data about their users’ preferences and interests, this quickly led to the development of paid advertising platforms. Suddenly, social media managers in charge of running campaigns for brands faced a problem.

Most noticeable was the drop in organic visibility. The use of new algorithms on Facebook meant that even a brand’s fans would not see every post from that business in future.

Facebook Zero Organic Reach Chart

Global agency Ogilvy & Mather notes that Facebook has been reducing organic reach for some time now. In 2013, just 16% of brand page fans would see their updates; by February 2014 this had fallen to 2% for brands with over 500,000 fans. Unofficially, Facebook sources have been advising community managers to expect reach to hit 0% eventually.

The only way to ensure brand posts are seen by consumers is through the use of each network’s built-in advertising program. This means applying for an ad spend budget and increased oversight from senior management, who are eager to know how that money is spent and what (if any) social media ROI is being realized.

So how do you prove social media ROI when running an ad campaign?

#1 – Set your metrics in advance

First, forego the vanity metrics. Follower count and page likes can give you signals about the health of your online community and are great for measuring top of the funnel success, but have a negligible effect on proving ROI.

Instead, base your metrics on actual user interaction with your ads – number of app downloads, number of completed sign-up forms, and number of products purchased. These are the figures that actually mean something in terms of revenue for your business.

#2 – Ask for input

The insights gained from social media extend far beyond the marketing department. Information on customer experience, support provisions, and product quality can all be gleaned from social media if you set out to look for it.

Social media does not exist in a bubble, so you should always ask for input from other departments about the metrics they would like to see collected and reported on. The results of such analysis can be hard to quantify, but if the insights help boost efficiency or cut costs, your social media ROI naturally increases.

#3 – Prioritize flexibility

If your business hopes to use social media insights to become more flexible and responsive, your collection and analysis routines will have to be similarly elastic. A flexible approach to social media ad buying will also allow you to refine campaigns as they are being executed to avoid wasted spend.

Without flexibility, you will never achieve the biggest bang for your buck, simply because you cannot adjust how and where ad budget is allocated effectively.


#4 – Use technology effectively

Each of the major social platforms has a selection of tools to help marketers maximize the value of their ad spend. But when executing a comprehensive, multi-platform campaign, your business needs a platform capable of centralizing operations to help simplify management and provide a complete overview of performance.

Without this high-level view, you will be unable to assess social media ROI until the campaign has been completed, the PPC budget is spent, and all statistics are collected and collated from each separate ad tool. A platform like ours here at Falcon Social gives you the big-picture data you need to prove social media ROI for your entire program, not just a facet of it. And using that information allows you to make informed decisions for a maximum return on ad spend.

Calculating social media ROI is not a dark art

Effective ad spend is notoriously difficult to master, particularly without real-time analytics to assess performance. Few businesses will waste $600,000 on ineffective social media marketing, but many will be unable to demonstrate any kind of ROI for their efforts.

However, social media ROI is more than simply keeping the bosses happy about budget spend. Measuring and acting upon social media ROI information can be applied immediately in a way that less organized and less statistical competitors cannot.

Managed properly, social media ROI can be your business’ secret competitive advantage in the online marketplace.

Want to learn more? Check out our free Social Media ROI handbook available for download below:

Understanding Social Media ROI

Effectively measure the ROI of your social media marketing so you can optimize it.


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