Competition for attention is fierce as businesses engage with audiences across multiple social media platforms.
Marketing leaders, social media marketers, and business owners all want to know one thing: are their social media efforts driving real business outcomes, or are they simply chasing vanity metrics?
In this guide, we’ll break down why social media ROI matters, how to measure social media ROI, and the strategies and tools you can use to maximize it in 2025.
You’ll learn about actionable steps, key metrics, and best practices that can help you tie your social media investment to broader business goals. We’ll also show how Brandwatch can help you achieve higher ROI and social media success without resorting to hard-sell tactics.
Whether you’re a social media specialist looking for fresh insights, a small business owner aiming to stretch your marketing budgets, or part of a large social media team hoping to prove the worth of every dollar spent, this article offers a 360-degree look at understanding social media ROI.
Let’s dive in.
Understanding social media ROI
Before you develop a plan to boost your social media return on investment, it's important to understand what it entails.
Social media ROI indicates the value – financial or otherwise – you receive in return for your social media investment.
It reflects how well your social campaigns, organic social posts, and paid social media campaigns contribute to your bottom line and broader business goals. Although the ‘bottom line’ typically implies direct sales, social ROI alsoencompasses other benefits like brand awareness, customer engagement, and meaningful engagement with your target audience.
Some organizations approach media ROI in a siloed manner, looking only at direct revenue from social ads or attributing a small portion of lead generation to social media. However, social media ROI – when you include all the other elements that don't have an obvious cost value – can provide actionable insights into how your social media strategies influence the entire customer journey.
Why is understanding social media ROI important?
Knowing the media ROI for your social media efforts helps you justify marketing budgets and understand where your money would be best spent.
And when your social media marketing efforts align with business objectives, there are all sorts of benefits. We’ll look at these later in this guide.
It's also just good practice to measure outcomes, so that your social media team can see what’s working and what's not. This process can highlight where you might have negative ROI and give everyone a chance to work on a fix.
Key metrics for measuring social media ROI
Before we delve into how to measure social media ROI, let’s break down some core social media metrics and other relevant data points that help clarify your impact.
Not every metric directly translates to profit, but each one plays a unique role in painting a full picture of your media ROI.
Engagement metrics
These include likes, comments, shares, clicks, and other ways your audience interacts with your organic social posts, social ads, or influencer marketing collaborations.
Engagement metrics indicate how well your content resonates with potential customers. While high engagement alone doesn’t always prove ROI, it often correlates with brand health, customer engagement, and future conversions.
Lead generation
Lead generation is essential for your social media marketing efforts. It’s all about finding people who are showing an interest in your products or services and might become future customers. If your social media campaigns consistently bring in solid leads, you’re one step closer to measuring a clear financial return.
Track sign-ups, inquiries, or any other lead-related conversion events to see where your social efforts are paying off. A tool like Brandwatch helps you tie these conversions to specific social posts or paid social campaigns.
Direct sales
Social commerce features and targeted social ads can lead directly to product purchases. Tracking direct sales through UTM parameters (in other words, a tracked link) and social media analytics tools can help you get an exact figure for social media ROI.
If your social media activities lead a user to click a link and complete an order, that revenue is a direct part of your media ROI.
Customer satisfaction and brand mentions
Not all returns on social media investment are purely financial. When used strategically, social media channels improve customer satisfaction by providing quick support or helpful content, and that satisfaction is valuable too.
Monitoring brand mentions and sentiment can show how your social media performance contributes to a stronger brand reputation. A positive sentiment usually means your social media strategy is coming across well, building customer trust and loyalty.
Customer acquisition cost and customer lifetime value
To understand the full scope of your social marketing strategy’s effectiveness, consider tracking both customer acquisition cost (CAC) and customer lifetime value (CLV). That's the cost of reaching a new customer and the money they'll bring in over their whole time shopping with you.
Ultimately, you want to aim for a low CAC and a high CLV. This means you’re finding new customers through social media – and they're sticking with you over time. Both metrics are really valuable in your final social media ROI calculation.
Step-by-step guide to measure social media ROI
Let's break down the process of measuring social media ROI – from defining your objectives to using a social media ROI formula.
Step 1. Define your business objectives
Start by mapping your social media strategies to your broader business goals.
For instance, do you want to boost direct sales, generate more leads, or improve customer satisfaction? Each objective will shape which social media activities you focus on and the metrics you track.
If you don’t have clear business objectives, you risk measuring vanity metrics that won’t help you prove the value of your social strategy.
Step 2. Identify relevant social media metrics
Not every metric will apply to your business objectives.
For instance, if your goal is lead generation, you’ll pay close attention to how many new email sign-ups, inquiries, or phone calls originate from social media platforms. If you want to measure brand awareness, monitor brand mentions and follower count over time.
By aligning key metrics with your objectives, you’ll have a more accurate picture of your media ROI and avoid data overload.
Step 3. Use tracking tools like Brandwatch and UTM parameters
One of the best ways to measure social media ROI is by using Brandwatch and UTM parameters on your links.
UTM parameters are snippets of code attached to your links that let you see exactly how users arrived at your website and where they came from. They look something like this: “utm_source=social&utm_medium=paid&utm_campaign=spring-sale”
With these parameters, Brandwatch can track visits, conversions, and revenue for each social media campaign. With this little trick, you'll soon know how many leads or sales originated from social ads, organic social posts, or influencer marketing collaborations.
And once you combine accurate tracking with social media analytics tools, you'll gain a really clear view of your social media performance, which is essential for calculating media ROI.
Step 4. Calculate social media ROI
The most common social media ROI formula looks like this:
Social Media ROI (%) = [(Total Social Media Revenue – Total Social Media Costs) / Total Social Media Costs] x 100
This is a simplified version, but it's a good starting point.
Total social media costs might include paid ads, social media management tools, your social media team’s salaries, and any additional costs related to creating content.
Total social media revenue includes any direct sales traced back to your social media activities, as well as attributing a portion of lead generation that ultimately converts into paying customers.
By following this process, you'll get a starting figure for social media ROI and will be able to determine whether you have positive or negative ROI for each platform or campaign.
If you discover negative ROI, consider switching up your social strategy or spending a bit more time and money on channels that are more likely to lead to a stronger media ROI.
How to improve social media ROI
Simply knowing how to measure social media ROI isn’t enough – if you want to see improvement over time, you'll need to know how to boost those returns too.
From refining your social media marketing efforts to better targeting your paid social campaigns, there are plenty of ways to enhance your media ROI.
Narrow your target audience
One of the quickest ways to improve social media ROI is by focusing on the right segments.
When you know your target audience well, you can create content they love and naturally engage with. You can even target ads to very specific groups of followers.
This is good for reducing wasted ad spend and helps you achieve higher conversions, whether your goal is lead generation or direct sales.
Collaborate with social media influencers
Working with social media influencers, especially those who align with your brand values, can give your engagement metrics a nice little boost and help you reach even more potential customers. Influencer partnerships often act as social proof since they build trust and drive conversions.
Just be sure to calculate social media ROI carefully when collaborating with influencers to ensure the partnership yields a positive media ROI. It's worth ensuring you're not spending too much and figuring out the benefits you'll likely see in return.
Use social media management tools
Using a bit of automation, tracking brand mentions, and scheduling content in advance can free up your social media team to focus on more important tasks.
Making careful use of a tool like Brandwatch Social Media Management is a good way to ensure valuable time isn't wasted on admin tasks that are unlikely to create much return.
Optimize your content mix
Take a look at which content formats – videos, infographics, blog posts – drive the most engagement or conversions. If you keep your past successes in mind when planning future content, you're more likely to see more of that success.
If you notice a particular campaign consistently leads to direct sales, consider what elements drive those results.
Keep testing new ideas, including social commerce features, to keep your presence fresh and exciting for followers.
Try retargeting tactics
Paid media or paid social campaigns can be even more effective when combined with retargeting tactics.
If someone visits your site via organic social posts but doesn’t convert, retargeting them with paid ads on social media platforms can remind them of your product or service and make them more likely to hit add to basket then checkout.
Retargeting is a powerful way to re-engage warm leads and improve media ROI.
Common challenges and pitfalls
Measuring social media ROI probably isn't the easiest task on your to-do list – but don't let that put you off.
Understanding the problems you might encounter – and knowing how to navigate them – can make the process a lot less daunting.
Attribution models
One of the biggest obstacles to measuring social media ROI is attributing conversions across multiple touchpoints. For example, a user might see your brand in paid social campaigns, read blog posts, and then purchase after clicking a link in your newsletter.
Using multi-touch attribution or advanced tracking solutions (such as well-structured UTM parameters) helps you figure out the exact source of the sale and give it a more accurate price tag.
Delayed conversions
Conversions don’t always happen straight after someone interacts with your social ads or organic posts.
A potential customer might research your brand for days – or even weeks – before finally reaching the checkout. This lag time can make it difficult to tie conversions to specific social media activities.
Sometimes, you'll never know what prompted someone to hit purchase. But, if you track the customer journey with Brandwatch, you'll have a better chance of finding out.
Non-financial value
Social media ROI doesn’t always show up as revenue. You might see improvements in customer satisfaction, brand mentions, or follower count that indirectly boost your business.
While these intangible benefits are part of media ROI, they’re harder to measure and often overlooked.
Social media activities can also influence purchase decisions at different stages of the customer journey, making it hard to assign a direct dollar value.
While it's tricky to assign an exact price tag in these circumstances, any benefits you spot are definitely worth mentioning in any report on your social media ROI. Just make sure you're not putting too much focus on vanity metrics like follower count – ideally, any boost in visibility will come with more conversions too.
Scaling measurement across multiple platforms
Social media channels differ in audience demographics and best practices. What works on LinkedIn may not work on TikTok.
Using consistent tracking, tagging, and social media analytics tools across platforms will help you see what works best on each platform.
Your social marketing strategy might require multiple tactics depending on the channel, but your measurement approach should remain unified. This way, you can spot negative ROI segments and do something about them as quickly as possible.
Underestimating content costs
Creating content that resonates often requires design, copywriting, and sometimes costly extras like video production.
If these costs aren’t factored into your social media ROI calculation, you’ll overestimate your profitability.
Using Brandwatch for better social media performance
If you want to measure social media ROI effectively and boost your campaigns, it’s important to make the most of tools that can handle advanced analytics, cross-platform tracking, and intuitive reporting.
This is where Brandwatch Consumer Research and Brandwatch Social Media Management come into play.
Comprehensive social data collection
Brandwatch offers many different ways to collect social data from various social media channels.
Your social media team can view your overall performance by consolidating this data in one place. This helps pinpoint where your social efforts are driving great results and where they might fall short.
Actionable insights for social media strategies
Data without insights is just noise. Brandwatch’s solutions transform raw numbers – such as engagement metrics, brand mentions, and conversions – into meaningful visuals that help team members at all levels make informed decisions about how their marketing strategy should play out.
Integrated social media management
Brandwatch Social Media Management allows you to plan, schedule, and monitor social media campaigns across multiple platforms.
This streamlines social strategy execution and performance tracking, letting you measure social media ROI in near real-time.
Advanced analytics to measure ROI
Beyond basic metrics, Brandwatch provides deeper analytics, such as sentiment analysis and industry benchmarking, to help you see exactly how your social media efforts impact your business objectives.
You can track everything from lead generation metrics to cost-per-conversion within the same interface, giving you a holistic look at your overall media ROI.
Team collaboration and workflowA social media marketer rarely works in isolation. Collaboration across departments – from marketing and sales to customer service – is key to achieving positive social media ROI.
This can be a game-changer in larger organizations.
With Brandwatch’s collaborative features, your entire social media team can be on the same page, which is great for better content planning and faster response times.
Frequently asked questions
By now, you should have a clearer picture of why social media ROI matters, how to measure social media ROI, and the strategies required to maximize it.
To make sure we've tied up any loose ends, let's finish on a few important questions.
What if I have a negative ROI on a particular campaign?
Negative ROI indicates that your social media investment is not yielding enough returns to cover its costs.
First, confirm your tracking is accurate. If it is, analyze which aspects of the campaign underperformed – for example, it might have been something to do with the messaging, audience targeting, or platform choice.
Once you've figured it out, adjust and try again.
How do I calculate social media ROI for influencer campaigns?
Generally, it's best to approach influencer marketing as you would a standard social media campaign.
Implement UTM parameters on any links the influencer shares, track conversions via Brandwatch, and consider the influencer fees part of your total social media costs. This helps you accurately measure ROI.
Can I measure social media ROI purely with engagement metrics?
Engagement metrics alone rarely provide a complete ROI picture.
While they signal audience interest, you'll need to tie them to deeper metrics like lead generation, conversions, or direct sales for a more accurate figure of ROI.
Maximize Your Social Media ROI: Strategies for Effective Measurement
You can use the same principles – like cost vs. revenue or cost vs. leads – for both paid and organic efforts.
However, paid social campaigns typically have more direct costs (ad spend), making it easier to link them to revenue. Organic social posts often focus on brand building and engagement – meaning it can be harder to track them to revenue unless you're using closely tracked links.
When should I revise my social media ROI formula?
There's no strict rule here. Just consider updating it whenever your costs change significantly, or you shake up your major social media channels.
Reviewing it if your broader business goals evolve is worthwhile, too, as ROI should be tied to your current objectives.
