Chapter 11: ROI Measurement
Chapter 11 of 15
Chapter 11: ROI Measurement
11.1 ROI Calculation
Calculating ROI demonstrates social media's business value and justifies investment. Track both direct revenue and indirect value.
ROI Formula:
- ROI = (Revenue - Cost) / Cost × 100
- Track revenue attributed to social media
- Include all costs (tools, ads, time, content)
- Calculate for specific campaigns and overall program
Revenue Tracking:
- UTM parameters for website traffic
- Promo codes and affiliate links
- Social commerce sales
- Lead generation and conversions
- Customer lifetime value from social
Cost Calculation:
- Advertising spend
- Tool and software costs
- Team time and salaries
- Content creation costs
- Influencer and partnership fees
11.2 Value Attribution
Attributing value to social media activities requires tracking customer journeys and understanding social's role in conversions.
Attribution Models:
- Last-Click: Credit to final touchpoint
- First-Click: Credit to initial touchpoint
- Multi-Touch: Distribute credit across touchpoints
- Time-Decay: More credit to recent interactions
- Custom: Business-specific rules
Value Types:
- Direct Revenue: Sales from social media
- Lead Generation: Qualified leads from social
- Brand Awareness: Reach and impressions value
- Customer Retention: Social's role in loyalty
- Cost Savings: Customer service via social
11.3 Advanced ROI Metrics
Advanced metrics provide deeper insights into social media's business impact beyond basic ROI.
Advanced Metrics:
- Customer acquisition cost (CAC) from social
- Customer lifetime value (CLV) from social
- Return on ad spend (ROAS)
- Cost per engagement (CPE)
- Brand lift and awareness metrics