Definition

social media ROI

Contributor(s): Lauren Horwitz

Social media ROI is the return on investment a company can expect to make from the time, money and effort the company spends on social media marketing

Over the past several years, as social media has become more entrenched in various aspects of business operations, business executives have often questioned the dollar value of investing in social media. The C-level suite in particular has been doubtful about investing in social media strategies when the ROI can not be evaluated in an objective way that demonstrates exactly how the investment is helping the company meet its business goals.  

Some marketers insist that it is quite possible to calculate social media ROI, as long as all aspects of the business established agreed-upon social media metrics or key performance indicators and conversion rates that are tied to business objectives. Others have argued that social media ROI should account for less direct benefits such as new product ideas, broader brand exposure and audience reach, and greater customer engagement  and positive customer sentiment overall. While these measures may be difficult to tie to specific dollar amounts, they can help companies reach revenue goals nonetheless.

This was last updated in January 2015

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