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True Cost of Social Media ROI

When considering social media marketing for your business, there are two factors you should know: Cost and ROI (Return On Investment). I’ve heard some business owners comment, "Since Facebook and LinkedIn are free, why should there be a cost?" However, they don’t consider the effort and time it takes to write good content and the posting of it all to different platforms. Others may say that social media is only an option in marketing and not measurable. Of course, with any investment you put into your business, there is risk. Understanding Social Media ROI really depends on your company and its overall goals.

What are your goals?

It’s important to include a marketing plan and goals for any advertising or marketing strategy you create. Is your overall goal to increase followers? Are you looking to sell more product? Increase traffic to your website? To determine social media ROI, it gets down how much you’re currently spending and how much your social media impact matters to your business - this is where you have to make some decisions for your company. Some companies may spend their money on more traditional forms of advertising, such as print or TV. It could be difficult for them to switch from traditional marketing to social media. However, social media ad spending may actually get more results in the long run, in fact, it has recently surpassed TV ad spending.

Tracking ROI

Before you start measuring your social media activities, here is a recommended list to follow:

  • Record website analytics – visitors, referral links, SEO rankings, etc.

  • Track customer satisfaction – look at referrals and recommendations from Facebook, LinkedIn or Google My Business.

  • Make a note of KPI’s (Key Performance Indicators) – what is the cost for customer acquisition, advertising, allocation, average sales per month, etc.? Its important to pay attention to these changes over time.

  • Monitor your current social media profiles – watch any changes with the number of connections you have on LinkedIn, Facebook likes and Instagram followers. Don’t forget about who’s subscribing to your newsletters and reading your blogs.

Understanding ROI

It’s crazy to think that many companies don’t even know how much they’re actually spending on social media. Take a look at which social media channel is bringing your company the most revenue right now and why. Also look at areas where you can improve. By monitoring these changes, you can move forward with a better game plan and hopefully see more revenue.

If you’re not sure which social media channel is right for you, experiment with different platforms such as LinkedIn, Instagram, Facebook or Twitter. For example, a restaurant, might benefit more from Instagram – customers will react and engage with beautiful photos of yummy dishes and the inviting ambiance. A mid-size consulting firm may do better having its presence focused on LinkedIn, where they can interact with potential clients and engage in conversation within their industry.

Social Media Campaigns

Again, once you define your goals (followers, sales, likes, foot traffic), it will be easier to measure your social media performance. It’s important to remember not to hit every platform at once – if you do, it can be time consuming and overwhelming.

After defining your marketing goals, budget and plan – what would be the best ROI for you? Try and set a company goal of having 10,000 visitors visit your website. You can then measure using Google My Business and Google Analytics to track the number of visitors as well as, how long someone spent on your site, what they clicked, if it prompted a phone call, and which calls turned into sales.

The impact of your social media campaign should be measurable from the beginning - with the value of each link trackable. This will make it easier to see which links are building traffic and promoting engagement and those that are not.

Although it may take some time and patience to see your ROI add up, there are other factors that can help enhance your social media presence. If you decide you want to hire a marketing company, make sure you go over your overall social media goals, analytics and that you’re on track for ROI.

Have more questions about creating a social media marketing plan that's right for you? Contact me at or call

(203) 429-9671.


Salty Red Dog Marketing, LLC is a marketing agency in Darien, CT & NYC. We service businesses with marketing strategies, social media and consultations.


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