How to Guarantee Your Social Media ROI is Zero

5 Reasons Your Social Media ROI Is Zero: Jaw-dropping But True

how to guarantee your Social media ROI is zero47.9% of marketers can’t measure any social media ROI.

Yet social media accounts for 10.6% of marketing budgets.

This information isn’t from some random group of people.

It’s research from Tiffany-quality organizations including Duke University’s Fuqua School of Business, the American Marketing Association and Deloitte.

Social media research- 2015 data

Social Media Spend As Percentage of Marketing Budget – [Chart]

Are you one of the marketers who can’t measure social media ROI? Is your c-suite blissfully happy with this?

Don’t worry you’re in good company.

60% of marketers said measuring social media ROI was the challenging aspect of their program according to Trust Radius.

Social Media ROI

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Social media ROI basics

Before diving into why your social media marketing may be guaranteed to yield no results, let’s examine social media ROI.

Sound scary?

Let’s admit up front that social media ROI sounds complicated and difficult.

It’s the letters R-O-I. They aren’t French for “king” (although I once told a boss that’s what it meant!)

ROI stands for return on investment.

Social media ROI gets down to basic math: addition, subtraction, multiplication and division. If you’re like me, you probably learned this by fifth grade with Mrs. Nicktauser.

Take a deep breath.

After years of teaching marketing students finance and analytics, I believe arithmophobia is real. But I also know you can overcome it!

The real social media ROI challenge is that social media results are either not captured or are too difficult to assign a value. 

Social Media ROI = [Return – Investment]/[Investment] 


  • Return = Financial value of social media results
  • Investment = Total costs associated with social media

Financial value of social media results:

Social media may yield results without a direct monetary value (like email addresses). In this case, use a proxy based past results. Select a metric consistent with other more easily tracked options.

Direct financial value results:

  • Email addresses for newsletter registrations or PDF downloads
  • Qualified leads captured via contact requests, quote forms or dealer sites.
  • Online purchases made direct from social media. 

Less direct financial results include:

  • Influencer relationships to help create and promote your content
  • Prospect information especially through the use of Facebook ads and related targeting. This can be a low price way to tap into otherwise difficult to obtain information. (BTW, on average small businesses invest about $1,000 to $2,000 per year in Facebook according to Borrell.)
  • Site traffic but take care–it doesn’t ensure long-term impact.

Costs associated with social media include:

  • Employee time = Total employee hours associated with social media X average salary per hour (Don’t overlook employee time outside of marketing such as technology or website.)
  • Agency costs= Segregate costs associated with social media advertising, content creation and other related expenses.
  • Social media tools= Total annual tool cost / average hours used per year
  • Social media advertising = Cost for paid advertising

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5 Reasons your social media ROI is zero

For most marketers there are 5 key reasons your social media ROI is 0.

how to guarantee your Social media ROI is zero


1. Your social media doesn’t have any goals

As with any form of marketing, social media requires a strategy.

You can’t just jump in the social media pool and engage. Like an Olympic swimmer, you must have a set of social media goals and a related plan aligned to achieve those goals.

To this end:

  1. Establish social media goals aligned with your business objectives
  2. Know your target audience not just whoever responds to your social media
  3. Create a plan to provide on-going quality content and engage regularly.

Don’t just measure what’s available or easy-to-track. You need to support your social media marketing with your business objectives and related metrics.

You can’t assume your social media marketing will yield results directly. Social media can increase your email house file, improve prospect information, and improve influencer relationships.

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2. Your social media doesn’t contain call-to-action

Ask your audience to do something specific. Incorporate a call-to-action that’s tailored to the specific platform. Your call-to-action isn’t for sale but rather to the next step in the process.

This problem isn’t limited to social media.

Minimize the information you ask for. The more you ask, the more prospects you’ll lose.

Interest social media users in doing something aligned with the platform where they’re active.

While online sales are every marketer’s social media manna, it’s unrealistic to expect social media participants to be in buying mode.

Skip shouting me, me, me!

Social media is about caring about your community and giving them the information and support they need.

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3. Your social media isn’t integrated with the rest of your marketing (or business)

To get the maximum bang for your marketing dollar, integrate all of your marketing.

Tailor your content and advertising by platform when you initially create it. This minimizes costs and ensures consistency.

Utilize social media across your entire organization. Include customer service, sales and content distribution. Have a set of social media guidelines to ensure employees understand how to represent your company on different platforms!

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4. Your social media helps prospects before you’re aware of them

Social media helps guide potential buyers to your product or information. Often before most companies start tracking actions leading to a sale.

Research shows the most social media interaction happens very early in the purchase process.

 Convertro_SocialMedia_report 2014-2

Both B2C and B2B customers start their research online and are at least 60% of the way through the purchase process before marketers realize that they’re in-market.

Add blogs to your social media mix. Offer the 5 basic of content types customers need before you know they’re shopping:

  • Provide in-depth product information
  • Answer their questions
  • Teach them how to use your products
  • Show them styling and/or best product practices
  • Offer ratings and reviews by trusted sources.

Social media can have a significant impact on whether you enter the prospect’s consideration set. Customers ask family, friends and social graph for input. All it takes is one bad experience with your firm or a great one with your competitor and you’re out before you strut your stuff.

Like product information, ratings and reviews may not appear on the top social media platforms. For example, most marketers consider Amazon to be a retailer. Yet 40+% of customers start their shopping research there.

Google VS Amazon Where US Customers Start Product Purchases - Chart

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5. Your social media isn’t the last channel touched

You may be missing the opportunity to measure your social media marketing without realizing it.

Many marketers only give credit to the last marketing channel touched whether it’s easier-to-track search, email, affiliates or another option.

Alternatively, they only measure what they’ve captured. To ensure your social media has a measurable ROI, determine your metrics before you start a campaign. Check that your analytics system can track results.

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The Social media ROI bottomline:

Measuring social media ROI isn’t always straightforward or easy to track.

But you must set your social media marketing up to track results and measure success.

To this end, integrate your social media with the rest of your marketing. Social media can’t be a stand-alone function.

At a minimum, use your social media to support your content marketing distribution.

Even better incorporate a call-to-action in every piece of social media that has tracking incorporated into your metrics.

What do you think? Do you have any suggestions to help other marketers track their social media ROI?

Happy marketing,
Heidi Cohen

Editor’s Note: This article was originally published June 6, 2011.

Heidi CohenHeidi Cohen is the President of Riverside Marketing Strategies.
You can find Heidi on , Facebook and .

Photo Credit: (Creative Commons Zero)

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