Social Media ROI: 14 Formulas to Measure Social Media Benefits

Measuring social media ROI can be a daunting task, but not impossible. Check out these handy formulas for calculating tangible social media benefits – advertising, content, leads,research, support, sales, and more!

Social Media ROI Formulas

(Click the heading links to jump down to that section.)

Benefits

Costs

·         Advertising Value 1. Online Social Mentions 2. Social Web Traffic Referrals 3. Search Web Traffic Referrals 4. Social SEO Improved Search Rank 5. Social Influencer Online Mentions 6. Social PR Mentions ·         Content Value 7. Articles 8. Photos 9. Videos ·         Research Value 10. Research Value - Social Insights ·         Support Value 11. Support Value - Online Self-Service ·         Lead and Sales Value 12. Social Leads (One-Time Value) 13. Social Leads (Lifetime Value) 14. Social-Aided Conversion

1.    Labor 2.    Software / Online Tools 3.    Equipment 4.    Promotional Costs 5.    Training 6.    Legal Risk

SOCIAL MEDIA TACTIC BENEFITS

Enjoy these 14 formulas and examples to aid your computations! (Be sure to replace example placeholder numbers with your own values or industry-relevant estimated percentages.)

ASK YOURSELF: 
How much would it cost if you had to pay for the equivalent achieved by social media? What tangible outcomes related to the sales funnel will be impacted?

---

1) Advertising Value - Online Social Mentions:

GOAL: Grow Awareness, Reduce Ad Costs

_____(#) brand/product online social mentions, pins, etc.
X _____ (CPI) equivalent display ad impression costs
______________________________________
= $ Display Ad Impressions Value
(CPM, or cost per 1,000 impressions, could also be used.)

Example:  Estimated 150,000 social impressions at display ad costs per impression (CPI) of $0.008 (or $8 CPM) = $1,200 equivalent display ad impressions value

---

2) Advertising Value - Social Web Traffic Referrals:

GOAL: Drive More Web Traffic, Reduce Ad Costs

_____(#) social referral clicks to website
X $_____ (CPC) equivalent display or social ad costs
______________________________________
= $ Social Ad Value

Example:  Estimated 150 social referral clicks to the website at social ad costs of $3.99 per click = $1,197 equivalent social ad value

---

3) Advertising Value - Search Web Traffic Referrals:

(e.g., social reviews or comments ranking in search results)
GOAL: Drive More Web Traffic, Reduce Ad Costs

_____(#) search referral clicks to website
X $_____ (PPC) equivalent search ad costs
______________________________________
= $ Search Ad Value

Example:  Estimated 500 search referral clicks to the website at search PPC ad costs of $2.99 each for the respective keywords = $1,495 equivalent search ad value

---

4) Advertising Value - Social SEO Improved Search Rank:

(e.g., social reviews, photos, or comments influencing search rank)
GOAL: Drive More Web Traffic

( _____% new organic search CTR − _____% old organic search CTR)
÷ _____% old organic search click-through rate (CTR) 
X _____(#) monthly organic search volume
_____________________________________
= Additional Organic Search Referrals

Example:  Increasing search rank from position 4 at 8.2% CTR to position 2 at 14% CTR with an average monthly search volume of 120,000 = 84,878 more search referrals

Check out Optify's Organic Search Click-Through Rate (CTR) Study for insights on search rank CTR differences to estimate benefits. (i.e. CTR: Position 1 @ 36.4%, Position 2 @ 12.5%, Position 3 @ 9.5%.) For ROI calculations, use your actual CTR values available via Google Webmaster Tools.

---

5) Advertising Value - Social Influencer Online Mentions:

GOAL: Grow Awareness, Reduce Ad Costs

_____(#) social influencers
X _____(#) average social network reach
X _____(#) notable online brand mentions
X $_____ paid spokesman or special guest costs (e.g. radio, TV, or direct mail endorsements)
/ _____(#) ad network reach or volume
________________________________
= $ Paid Endorsement Ad Value

Tier paid spokesman fees by respective social influencer levels. Document tiers with labels  (e.g. A-Level, B-Level, etc.) to make historical tracking easier. Social network reach and ad reach should ideally be equivalent since pricing tiers may vary. (This formula adjusts for network reach differences assuming endorsement costs are the same regardless of ad volume.)

Example:  5 industry influencers (B-level) with an average social network reach of 5,000 making 10 notable brand mentions at an equivalent paid spokesman (B-level) cost of $1,500 each with an ad network reach of 10,000 = $37,500 equivalent paid endorsement ad value

---

6) Advertising Value - Social PR Mentions:

GOAL: Grow Awareness, Reduce Ad Costs

  _____(#) event-related online brand mentions (e.g. announcement, product release, etc.)
X $_____ equivalent press event cost
/ _____(#) average brand mentions from press event 
_________________________________
= $ Press Event PR Value

Example:  50 event-related online brand mentions (not fuelled by a paid press event) at equivalent press event costs of $800 that yield an average 40 brand mentions = $1,000 equivalent press event PR value

---

7) Content Value - User-Generated Content (UGC) Articles:

GOAL: Grow Awareness, Improve SEO, Aid Conversion (Social Proof), Reduce Content Costs

_____(#) online stories or articles with significant brand focus or mention
X $_____ equivalent content creation cost
_____________________________________
= $ Article Value

Tip: Tier creation costs by content quality (e.g., length, sentiment, images, uniqueness) and/or Domain Authority levels.

Example:  Estimated 5 stories discovered at an equivalent content value of $350 each = $1,750 equivalent content article value

---

8) Content Value - User-Generated Content (UGC) Photos:

GOAL: Aid Conversion (Social Proof), Reduce Photography Costs

_____(#) user-generated brand photos 
X _____% photo shoot quality 
X $_____ equivalent photo shoot total costs
/ _____(#) average photos from photo shoot 
_______________________________
= $ Photography Value

Example:  Estimated 80 brand-specific unique user-generated content (UGC) photos discovered at 70% photo shoot quality at an equivalent photo shoot total cost of $12,000 that yields an average of 30 quality photos = $22,400 equivalent photography value

---

9) Content Value - User-Generated Content (UGC) Videos:

GOAL: Grow Awareness, Aid Conversion (Social Proof), Reduce Video Costs

_____(#) user-generated brand videos 
X _____% brand-produced video quality
X $_____ equivalent brand-produced video total cost
___________________________________
= $ Video Value

Be sure to include resource time, equipment rental, shoot fee (e.g. location), and editing for total video production costs.

Example:  Estimated 3 brand-specific user-generated content (UGC) videos discovered at 50% brand-produced video quality at an equivalent brand-produced video total cost of $10,000 = $15,000 equivalent video value

---

10) Research Value - Social Insights:

GOAL: Market Research, Improve Customer Satisfaction, Reduce Research Costs

_____(#) brand online insights/comments
X _____% focus group insight quality
X $_____ equivalent focus group cost
/ _____(#) insights from average focus group 
___________________________________
= $ Focus Group Value

Example:  Estimated 150 useful monthly brand insights/comments at an equivalent 90% quality of a paid focus group that costs $3,000 and typically yields 100 helpful insights = $4,050 equivalent market research value

---

11) Support Value - Online Self-Service:

GOAL: Enable Self-Service, Reduce Support Costs

_____(#) weekly support calls per topic
X _____% calls likely solved by self-service
X $_____ average support phone call cost 
___________________________________
= $ Call Support Value

Example:  Estimated 1,500 weekly support calls at which 70% could be resolved online via self-service at an equivalent support call value of $6.30 each = $7,056 equivalent call support value

---

12) Sales Value - Social Leads (One-Time Value):

GOAL: Grow Revenue, Generate Leads, Acquire New Customers

_____(#) qualified online social leads identified
X _____% lead-to-customer conversion rate
X $_____ (AOV) average order value
________________________________
= $ Lead Sales Value (Single Purchase)

Example:  Estimated 100 qualified leads routed to sales teams with a typical lead-to-conversion rate of 4% at an average order value (AOV) of $2,500 = $10,000 equivalent converted lead sales value (single-purchase)

---

13) Sales Value - Social Leads (Lifetime Value):

GOAL: Grow Revenue, Generate Leads, Acquire New Customers, Retain Customers

_____(#) qualified online social leads identified
X _____% lead-to-customer conversion rate
X $_____ (LTV) customer lifetime value
__________________________________
= $ New Customer Lifetime Sales Value

See: How To CalculTate Customer Lifetime Value (LTV).

Example:  Estimated 100 qualified leads routed to sales teams with a typical lead-to-conversion rate of 4% at an average customer lifetime value (LTV) of $22,500 = $90,000 equivalent converted lead new customer lifetime sales value

---

14) Sales Value - Social-Aided Conversion:

GOAL: Grow Revenue, Boost Conversion

( _____% new conversion rate − _____% old conversion rate)
/ _____% old conversion rate
X $_____ average # monthly products sold 
X $_____ average product sales value
__________________________________
= Increased Sales Value

Example:  Estimated conversion rate increase from 2% to 3.5% with an average 100 monthly products sold at $750 = $32,142 more in monthly product sales