Website optimisation | 10/04/2017

Why you’re measuring the ROI of your social media activity wrong

Posted by Lawrence Greenlee

Don’t take it personally, it’s not just you. 60% of marketers say that measuring ROI is their biggest social media challenge, and 80% are relying on likes and shares without taking into account whether these channels are having any impact on business objectives.

A wise person once tweeted, “Having 300,000 Facebook fans is not a business objective.” Fans can be bought cheaply if you’re willing to be indiscriminate enough with your targeting; those numbers mean nothing if the people behind the numbers aren’t impacting your bottom line. Before you jump into measurements, you need to understand the aims of your business, and then work out how your social channels can support them.

One channel to rule them all

No one marketing channel can do everything on its own, and your channels can’t work effectively in isolation. Social media is just part of your marketing mix, and there are a number of ways in which it can impact your success in other areas. When it comes to measuring the success of these channels, you need to look outside the social platform itself to understand its true effects.

If you’re clear on what you want to get out of the activity, you can set robust KPIs that link your efforts to your business objectives. The first step is to think about the customer journey.

Understanding which stages are your weakest links will enable you to shape the activity you need, and to measure whether it’s having the required impact.


If you’re a relatively new brand, or launching a new product, or you’re a smaller company competing with big household names, you probably need to improve your brand awareness. Social media offers a relatively cost-effective way to get your brand in front of a highly targeted audience and connect with the people most likely to care about your product.

Brand awareness is difficult to measure, but not impossible. Online listening tools (such as Brandwatch or NUVI) will allow you to track any increase in people talking about your brand or product, as well as analysing how you measure up to your competitors. You can use targeted social advertising to get your message out to the right people and track the number of people you are reaching. You also might want to track an increase in fans or followers.

Hang on, you told me not to measure my number of fans?

Not on its own, no. But a steady growth in fans or followers – of the right type – is an indication that word is spreading about your brand. It’s important to make sure these are quality followers and that they are from the right demographic and psychographic groups. If you know that your target audience is 20-30-year-old females and you only sell your product within the UK, an influx of male 50+ fans in Venezuela is no good to you.

Any increase is also worthless if the new fans you’ve acquired aren’t engaging with you; in fact, due to the way the algorithm of almost every social network operates, lots of unengaged fans will actually hurt you as it will reduce the reach of your posts. This means less people see your content. So along with an increase in fans needs to come an increased, or at least maintained, engagement rate.


Once a potential customer knows of your brand and decides this is something that interests them, they’ll likely look around at alternative options and assess the best prices and highest quality they can get. If there is more and better information out there about your competitors than you, these customers are more likely to buy with them.

It’s worth knowing that 43% of UK consumers are doing their research through social channels, and this number is growing. Many customers will now take to social media without even bothering with a search engine. Ensuring that there are plenty of social media reviews and recommendations out there for your brand is vital, and that your customers can find the information they want on your brand and products.

Good indications that your social media activity is effectively supporting the research phase include an increase in search volumes for brand terms, increased social referrals and organic traffic to your website, visits to any social selling platforms (such as a Facebook Shop), and an increase in time spent on your site (particularly in regards to social traffic).


If your product is an expensive or important one, customers often won’t buy straight away. They’ll go off and think about it for a bit. In that critical consideration phase, while they’re pondering the merits of your brand vs your competitors, 80% will be influenced by other social media users, even ones outside their own immediate networks. Reviews and recommendations, again, are going to be highly important.

This is the stage where your brand story – who you are and what you stand for – comes to the fore. People are prepared to spend up to 46% morewith a brand they consider to be “meaningful” than with brands that they don’t.

The levels of engagement with your content – both on social media and on your own site – are useful metrics here, as well as repeat visitors to your site. If you have an email newsletter, a rise in data capture via social media could be very useful to enable you to follow up with customers who are currently in the consideration phase and drive them to make that purchase.


All roads, hopefully, lead to this point, and if all the other stages of the customer journey are performing well, you should see more purchases being made. Social media is less likely to be a direct revenue driving channel than some, so if you’re measuring ROI by last-click revenue, the numbers could well look disappointing. People are less likely to be in a buying frame of mind while browsing social channels (they’re being social right now, not shopping), and they’re also more likely to be on their mobile while they probably prefer to make a purchase on their computer.

However, social channels are a great way to introduce new customers to your brand, ready for them to convert later on; for example, people who have previously seen messaging for a brand on social media are twice as likely to click on a PPC advert, and those that do click are twice as likely to convert. So rather than only looking at the number of purchases made as a direct result of clicking on a social media link, measure how all of your channels are performing. If your social media activity has gone well, you should see an increase across the board.

Following social media campaigns, our clients see on average:

  • 29% increase in organic revenue
  • 28% increase in direct revenue
  • 66% increase in PPC revenue


This stage is in many ways the holy grail for marketers – where customers not only become repeat buyers, but go back to influence everyone in all the other stages of the cycle. Social media is an invaluable tool to help amplify your brand ambassadors.

Measures of advocacy might include the number of reviews on a particular platform, the number of links being shared to your site, and referral traffic from bloggers and influencers.

Acquiring a new customer is around five times more expensive than retaining an existing one. Transitioning your customers from ones who’ve purchased to ones who love the brand is ultimately going to be good for your bottom line.

So how exactly do you work out the ROI?

There’s no set formula for measuring social media success – it all depends on the goals of your business. Understanding where you need to get to is the first step on the journey.  And, as with any long journey, you won’t get there with just one mode of transport.

Trying to calculate a direct ROI from your social media activity alone will only mislead you. What you’re actually trying to calculate is a return from your marketing activity. Think bigger picture – did your social media activity coincide with increased revenue from other channels in the following months? Were the goals you set for your social activity met, and did that have the impact on the overall purchase cycle that you intended? The ultimate litmus test for any campaign should be how it affected the bottom line, but you’ll only see the results if you’re looking at the process as a whole.

A carefully crafted marketing strategy, that understands your audience and their purchase cycle, will bring together all of the tools available to your business and ensure they’re working effectively in unison to deliver the best possible results. This is where you’ll see the true return on investment in financial terms.

If you would like to learn more about integrating your social media activity with your other marketing channels to drive real results, give us a call on 01273 208913 or email