How to Determine Facebook and Twitter ROI

By Nicole Hernandez, social media specialist, at San Jose Consulting

Why Social Media ROI Must Connect to Business Results

How do marketers determine their return on investment (ROI)? The following statement makes it difficult for marketers to prove their worth to CEOs.

73% of CEOs think marketers lack business credibility and are not the business growth generators they should be, while 77% of CEOs think marketers don’t talk about what really matters: sales.

To answer that challenge, every company or brand needs to establish the purpose of its social activity before deciding how to measure Facebook and Twitter ROI.

Two Rules for Measuring Facebook and Twitter ROI

• Set clear goals. Define the role Facebook and Twitter are expected to play in the customer journey, brand relationship or sales process.
• Establish measurable objectives. Choose outcomes that can be tracked, such as engagement, traffic, leads, conversions or revenue contribution.

Connect Social Metrics to Marketing ROI

Social activity is most useful when its metrics connect to a larger business objective. Engagement alone is not the finish line; marketers need to understand whether social activity is helping create demand, improve customer relationships or support growth. San Jose Consulting’s Market Return on Investment approach applies that same discipline to broader marketing investment decisions.

How will your brand use social media, and what business result will prove that the effort is working? Related guidance on consumer insights can help define the behaviors and outcomes worth measuring before campaign activity begins.

A Practical Social Media ROI Framework

Start with the business outcome, then work backward to the platform metrics that can reasonably indicate progress. For example, awareness efforts may emphasize qualified reach and branded search lift, while lead-generation programs should connect social traffic to form completions, sales opportunities and revenue. The objective is to avoid treating likes, followers or impressions as proof of business impact when they are only intermediate signals.

That same discipline is reflected in San Jose Consulting’s Business Case Development, which connects marketing activity to decision criteria, expected outcomes and measurable value.

Key Social ROI Takeaways

• Define the business objective before selecting platform metrics.
• Separate leading indicators such as engagement from outcomes such as leads, sales or retention.
• Use consistent attribution rules so performance can be compared over time.
• Evaluate social media as part of the broader customer journey rather than as an isolated channel.

Frequently Asked Questions

Are followers and engagement a form of ROI?

They can be useful indicators, but they are not financial return by themselves. Their value depends on whether they contribute to a defined business objective.

What should a company measure first?

Start with the outcome leadership actually cares about—revenue, leads, retention, demand or another measurable goal—then identify the social signals that help explain progress toward it.

How should social media be compared with other channels?

Use common business outcomes where possible and account for the role each channel plays in the customer journey. Not every channel closes the sale directly, but each should have a defined contribution.

See the original InventHelp social media infographic referenced in this article.