Social Media ROI: Mythic or Measurable? Six Experts Weigh In

February 4, 2014

Though social media marketing has now become almost a universal practice, the question of whether or not its value can be quantified with any precision remains open.

Does social media marketing produce measurable ROI—and if so, how does one measure it? Or is social media marketing just a required practice because of its value for content marketing, customer service, market engagement, web presence optimization, and SEO—whether its ROI can be determined with any accuracy or not?

Can the ROI of social media be measured?Despite well-crafted arguments from sources like John Heggestuen on Business Insider that social media ROI is a myth, and Angie Schottmuller on Search Engine Watch making the opposite case (and providing more than two dozen formulas for measuring the return on social media efforts), the social media ROI debate rages on.

Six experts continue the argument below, three on each side of the issue. What do you think?

You can’t calculate ROI from social media…

Analyze This: A Social Media Measurement Process by FeedBlitz

Yvette PistorioYvette Pistorio shares tips from Jay Baer on social media measurement, such as the importance of selecting the right social media marketing metrics to track, and doing so as early as possible in the social marketing process. She contends that calculating the ROI of social media “can be difficult with social media so you may want to take a look at how your efforts tie to business success over the long haul.”

The Death Of Social ROI — Companies Are Starting To Drop The Idea That They Can Track Social Media’s Dollar Value by Business Insider

John HeggenstuenAre brands moving away from trying to quantify the ROI of social media marketing? Yes, writes John Heggestuen, who reports that “Between 2010 and 2013, the percentage of marketers using a revenue-per-customer metric on social media went from 17% to 9%, according to the February 2013 CMO survey.” Brands are instead focusing on reach, engagement and sentiment metrics.

CMOs On Social Media – Where’s The ROI? by Forbes

Dorie ClarkDorie Clark reports on a survey of CMOs which found that “Almost half (49%) said they aren’t able to quantify whether social media has made a difference for their companies, while 36% said they had a good sense of qualitative – though not quantitative – results. Only a meager 15% said they’ve seen a proven quantitative impact.” Lack of a clear strategy often contributes to the inability to quantify results.

…of course you can! And here’s how.

Social Media ROI: 11 FREE Tools for Measuring Social Media Success by Search Engine Watch

Chuck PriceCan the ROI of social media marketing be measured? Chuck Price reports that Nicole Harrison is “adamant that social media done correctly will deliver results and recommended the following list of 11 free tools for measuring both ROI and social media success,” including SocialMention, TweetReach and Keyhole.

10 Examples of Social Media ROI [INFOGRAPHIC] by Social Media Today

Pam DyerContrary to the story above, Pam Dyer presents an infographic which illustrates 10 real-world examples of social media ROI for brands, such as Kraft’s “National Thank You Day” campaign for Toblerone, which drove half a million website visits and increased sales of Toblerone by 132%.

Calculating ROI from Social Media – Problems, Pitfalls & Breaking all the things… by Distilled
***** 5 STARS

Hannah SmithContending that “ROI is a woefully poor measure of the success or failure of social media activity…(not a bad metric but) it’s misunderstood and often misappropriated,” Hannah Smith proceeds to explain the calculation, uses and limitations of ROI analysis, and suggests other metrics (related to brand perceptions and reputation management) that may be more suitable for measuring the value of social media initiatives.

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4 Responses

  1. Yvette Pistorio 

    Hi! Thanks for referencing my post! However, I never said measuring social media ROI can’t be done – it most definitely can, but it might be difficult. The calculation for ROI is sales minus expenses, divided by expenses, expressed as a percentage. It’s not always that cut and dry when you’re measuring your social media efforts. However if your social media efforts are part of an overall marketing/communication strategy, you can easily track things such as leads, converted leads, shortened sales cycle, improved margins, and increased fundraising.

  2. Tom 

    Hi Yvette – thanks for the comment, and apologies if I mischaracterized your position! “Can’t calculate” may have been too strong, but you do (eloquently and helpfully) point out the challenges in measuring social media ROI with precision. Your quote from Jay Baer is spot-on: “You can’t prove that social caused that success, but it sure looks fishy.” Say hi to Gini!

  3. It sounds like it depends on what you measure. if you have a particular piece of content loaded onto a platform with a link inviting readers to learn more, you could measure that amount and figure out if what you spent to get those click throughs.That can be measured, but because of the inherent sharing nature, you probably need to keep you capture mechanism in place for a longer period of time than with more traditionally measurable pieces like PPC ads.

  4. Tom 

    Great point Stephen. The challenge is – this isn’t the only (or even necessarily the best) way to get value from social media. Increased brand awareness, credibility, sharing by influencers – there is a lot of potential value that is difficult to isolate and quantify in an ROI calculation.

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