How to Measure ROI of Social Media Campaigns

Using Hospitality Social Media Campaign Metrics for Greater Impact

Social media is everywhere, but is it actually working for your business? It’s easy to get caught up in chasing likes and shares, but the real question is: are your efforts bringing in results that matter? Whether it’s new leads, more bookings, or loyal customers, understanding your social media ROI (Return on Investment) is the key to ensuring your time and money aren’t going to waste.

If you’ve ever wondered how to measure what you’re getting back from social media or how to tweak your approach for bigger results, this guide is for you. Let’s break it down step by step so you can make social media work harder—and smarter—for your business.

Calculating Social Media ROI

Social media ROI, or return on investment, is the value generated from your social media activities compared to the investment made.It helps you identify which tactics work and which do not, enabling you to optimise your strategy.

The formula for calculating ROI is:

(Return – Investment) / Investment X 100 = Social Media ROI

The return represents the value generated from your social media efforts, while the investment includes your time, tools, and advertising costs.

For example, if a cafe invests £200 in a social media campaign and generates £1,000 in revenue, the ROI would be 400%, indicating a successful campaign.

Calculate Your Social Media Investment

To calculate social media ROI accurately, you must consider all the costs associated with your social media activities. These costs may include:

Time: Calculate the number of hours spent on managing your social media channels and multiply it by the hourly pay rate for your workers.
E.g. if you have an employee who spends 20 hours a week managing your social media channels and earns £20 per hour, then the time cost would be £400 per week.
Tools and Services: List the tools and services you use to run your social media channels and calculate their total cost. E.g. you may need a paid-for scheduling tool, a media library, an analytics platform, and an influencer database.
Advertising Costs: Consider the amount you spend on advertising, whether it’s through direct ads or pay-per-click campaigns.
For instance, if you run weekly campaigns on Facebook and Instagram, you should factor in the cost of each campaign, including the budget you set and any fees associated with paying for the services.

You can determine your total social media investment by adding up these costs.

How to Measure the Return

Social media investment returns can be measured differently, depending on your objectives. Some common metrics include:

Engagement: This measures the level of interaction people have with your content and brand. It includes metrics like clicks, shares, likes, and brand mentions.
Reach: The reach metric indicates how many people saw and interacted with your social media content.
Leads: Social media can play a significant role in lead generation. Tracking leads allows you to understand which channels and content drive conversions.
Conversions: This metric measures how social media content and posts convert into desired actions, such as sales or sign-ups.

You can determine your social media campaigns’ value by assigning values to these metrics.

E.g. if a post leads to 10 new leads, you can assign a value to each lead and compare it to the cost of the post to get a return value.

Calculate the ROI

Once you have measured the return and calculated the investment, you can use the formula mentioned earlier to determine your social media ROI.

Your social media efforts generate profit if the result exceeds 0%.

Anything below 0% indicates a loss.

For example, if a boutique hotel invests £300 in a social media campaign to promote weekday stays and generates £900 in revenue, the ROI would be:

$ROI=900−300300×100=200%\text{ROI} = \frac{900 – 300}{300} \times 100 = 200\%$

This 200% ROI demonstrates a successful campaign, doubling the initial investment.

How to Improve Your Social Media ROI

Understand Your Audience

To achieve a higher ROI, it’s important to understand your audience and their preferences. Conduct market research and analyse your target demographic to create content that makes them stop and look. Develop buyer personas to really understand their needs, interests, and pain points. You should create a persona for each customer segment. For example, if you’re targeting millennials, use visuals, fun language, and interactive elements in your content to make it more engaging and effective.

Create Compelling Content

Creating high-quality and engaging content is essential in a saturated social media landscape. Focus on delivering value to your audience by providing relevant, exciting, and entertaining content. Experiment with different formats like videos, ephemeral content, and interactive posts to capture attention and drive engagement. You could create a series of polls or quizzes on Instagram stories to increase engagement and encourage people to interact with your brand.

Social Media Lead Generation

Social media can be a powerful tool for lead generation. To capture customer information, including lead capture forms on valuable content assets like guidebooks or special offers. Link your campaigns to your specific activities and track the number of leads generated to measure their impact on your ROI. For example, you could create a guidebook on a specific topic, such as the local area, and share it on social media with links to a special landing page with a form to capture customer information.

Test and Optimise

Continuously test and optimise your social media campaigns to improve their performance. Experiment with different ad types, audience targeting, and messaging to identify what works best for your audience. What do they like? What are they responding to?

Use A/B testing to compare different versions of your content and optimise based on the results. Test different versions of your ad copy to determine which one receives a higher click-through rate, or test different visuals to determine which one drives more results.

Update Your Social Media Profiles

Your social media profiles serve as the first impression for potential customers. Optimise your profiles using high-quality videos, images, behind-the-scenes, and content that informs and entertains. Make sure that your profiles accurately reflect your brand image and values.

Collaborate With Influencers

Influencers can help amplify your brand’s reach and drive engagement. Identify influencers who align with your brand values and have a significant following in your target market. Collaborate with them to create sponsored content or partnerships that promote your products or services. Work with micro-influencers and expert content creators and develop mutually beneficial brand partnerships.

A vegan food company can work with a vegan food blogger to create sponsored content that promotes their products to the blogger’s followers. A hotel could work with a Local Travel Photographer to capture the area’s authentic culture.

Stay Updated on Social Media Trends

Social media platforms and trends are constantly evolving. Stay updated on the latest trends and changes in consumer behaviour to make informed decisions about your social media strategy. Monitor industry reports and analyse data to identify which platforms are most effective in achieving your business goals.

Connect with the Media

Use paid media and PR to expand your social media campaign’s reach. Issue press releases, tag relevant media outlets in your posts, and build relationships with journalists. This can help you gain backlinks and media coverage and increase your brand’s visibility. Boost your best-performing posts to reach a wider audience.

Set Goals and Track Progress

Establish clear goals for your social media campaigns and track your progress regularly. Use tools like Google Analytics to set goals and track key metrics such as website traffic, conversions, and engagement. Analyse the data to understand which strategies drive the most significant results and make data-driven decisions.

Take-Aways

Social media is no longer just an optional tool for marketing—it’s a powerful driver of engagement, awareness, and revenue. You can transform your social media campaigns into measurable successes by understanding your audience, creating compelling content, and continuously optimising your strategies.

Remember, ROI isn’t just about the numbers; it’s about learning what works for your brand and audience. Each campaign offers an opportunity to refine your tactics, build stronger connections, and drive real results.

Start small, track your progress, and don’t be afraid to innovate. With the right approach, your social media efforts can deliver not just profits but also a stronger, more connected brand identity.