What is the value of social media?

Measuring results from social media marketing can be difficult as much of the benefit is indirect and not easily traceable.

Measuring results from social media marketing can be difficult as much of the benefit is indirect and not easily traceable.

E-commerce companies have different approaches to social media. Some see it as a way to create brand awareness, for example with print and TV ads. Others use it as a customer service portal for engagement. Some companies consider social media as a paid marketing channel, similar to Google Ads.

Regardless of the approach, a company that spends time or money on social media should measure the results. I will discuss how to do this in this post.

Traditional ROI

Use your analytics platform to see how many users, page views, conversions, and order values ​​your social media channels have produced. This makes it easy to compare, say, Facebook (organic or paid) with other sources like paid search or referrals from third parties.

Calculating your return on investment from social media ads is easy. But what about organic traffic from social media?

Some companies consider employee costs when calculating organic ROI. After all, employees spend time publishing content and collaborating with customers and prospects. And the cost of a dedicated social media marketer can be easily determined.

However, creating a direct link between activity on social media and revenue is usually not easy. A consumer may first see a product on an influencer channel. The consumer could then have searched for it on Google, found the seller's website and completed the purchase. Without the influencer's posts on social media, the consumer would have been aware of the product.

Thus, secondary measurements are often necessary to see the actual effect.

web Traffic

Merchants should be able to correlate the lift in web traffic from posts on social media. For example, a merchant can measure traffic from a post on Tuesday at. to one from the previous week. But with seasonality and external events in play, the best method is to compare traffic over several days and multiple posts.

Average lift over time helps to correlate sales from each social channel, assigning the percentage of total conversions to the source. A merchant could verify the effect by stopping social media for a week or two and then tracking the total sales and traffic.


Social media can increase brand awareness, which is likely to generate revenue eventually. The concept is similar to content marketing, which can create more organic search traffic but not necessarily immediate sales.

… social media can increase brand awareness, which is likely to generate revenue eventually.

The measurement here is to track all mentions of your brand on social media using tools like Google Alerts (free) or Sprout Social (not free). You can then correlate the brand names on each social channel to the total traffic, regardless of the channel, to see the effects of increased awareness. In addition, the calculation of the lift from the said brands can help determine the value of each social media platform.

To correlate brand awareness with conversions, compare quarterly or annual sales with the increase or decrease of brand names.


How a company publicly responds to complaints and questions can make or break its reputation.

There are several ways to measure engagement on social media. First, track how many people work with your company every week or month and the purpose of their questions. You can then quantify at a high level the overall market satisfaction for your products and services.

In addition, social media engagement can provide insight into your company's response times, campaigns, problem solving and delivery policies. Social media listening tools like Sprout Social or Sysomos can help quantify engagement by filtering and analyzing dialogue and quantifying it in different ways.

Basic stats for each social platform include the number of followers, number of likes, interactions, site clicks, and conversions. Tracking these can show if you engage followers, which posts are effective and the best post times. Everyone is critical to optimizing a social media channel.

Total return

Calculate the total return on social media using the following formula.

Return on investment = (Total sales – Total expenditure) / Total expenditure * 100

Where in:

Total sales = Total direct sales from social channels + Estimated sales from increased web traffic + Estimated sales from brand awareness + Fixed monetary benefit from positive engagement

Total expenses = Costs for advertisements and influencers + Costs for employees or consultants + Other indirect expenses – Savings from customer service calls and emails

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