How To Calculate The ROI Of Your Social Media Campaigns?

Following is the formula to calculate the ROI of your Social Media Campaigns:

Social Media ROI = (Total economic value generated through Social Media Campaigns – Total Cost of running Social Media Campaigns)/ Total Cost of running Social Media Campaigns * 100

Here,

Total economic value generated through Social Media Campaigns = Total Revenue generated through Social Media Campaigns + Assisted Conversion Value of Social Media Campaigns 

Social Media not only helps in completing a conversion but also help in initiating and assisting the conversions which are completed by other marketing channels (like Organic, PPC, Email, Display, Direct, Referral etc).

Total Cost of running Social Media Campaigns = (Total number of hours spent on Social Media * Salary per hour) + Total ad spend on different social media channels.

For example, lets calculate the total economic value generated through Facebook campaigns (both paid and organic).

Step-1: Navigate to Acquisition > All Traffic > Source / Medium report in your GA view and then apply ‘Facebook’ filter:

Step-2: Change the data range of your report to the last one month.

Step-3: Note down the reported sales:

Step-4: Navigate to Conversions > Multi Channel Funnels > Assisted Conversions report in your GA view:

Step-5: Click on the ‘Source’ tab, apply the ‘Facebook’ filter and then note down the assisted conversion value:

Step-6: Calculate the total economic value generated by Facebook campaigns:

Total economic value generated through Facebook Campaigns

= Total Revenue generated through Facebook Campaigns + Assisted Conversion Value of Facebook Campaigns

= $5505.38 + $3993.96

= $9,499.34

Step-7: Calculate the total Cost of running Facebook Campaigns.

Let us suppose that the total number of hours spent on Social Media by your employee in the last one month = 20 hours.

His salary per hour is $50

Your total Facebook ad spend (as reported by Facebook Ads Manager) is = $1500

So now the total Cost of running Facebook Campaigns

= Total number of hours spent on Facebook * Salary per hour) + Total ad spend on Facebook

= (20 hrs * $50/hr) + $1500

= $1000 + $1500

= $2500

Step-8: Calculate the ROI of your Facebook marketing campaigns

Facebook ROI = (Total economic value generated through Social Media Campaigns – Total Cost of running Social Media Campaigns)/ Total Cost of running Social Media Campaigns * 100

= ($9,499.34 – $2500) / $2500 * 100

= 280%

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Himanshu Sharma

Digital Marketing Consultant and Founder of Optimizesmart.com

Himanshu helps business owners and marketing professionals in generating more sales and ROI by fixing their website tracking issues, helping them understand their true customers purchase journey and helping them determine the most effective marketing channels for investment.

He has over 12 years experience in digital analytics and digital marketing.

He was nominated for the Digital Analytics Association's Awards for Excellence.

The Digital Analytics Association is a world renowned not-for-profit association which helps organisations overcome the challenges of data acquisition and application.

He is the author of four best-selling books on analytics and conversion optimization:

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