ROI of Social Media Marketing: Knowing What to Measure

ROI of Social Media Marketing - Knowing What to Measure

We see a lot of businesses that spend a considerable amount of time and resources on social media despite being unable to create a rule of ROI measurement. Are they taking a leap of faith?

Being on Facebook, Twitter, LinkedIn and other social networks is an irresistible marketing opportunity, simply because, well, a lot of people spend time on those sites. But the very fact that marketing activities are scattered among several sites – each demanding its own unique style of promotion – can make ROI more difficult to determine, if at all possible.

That possibility is within reach, at least according to Angela Hausman, PhD is the founder of Hausman & Associates, a full-service digital agency operating at the intersection of marketing and social media. She proposes several points on how marketers can gauge their marketing success on social media in this excerpt from a post at

The Four-Factor Model

A brand needs a single metric capable of evaluating the overall performance of their social media campaign. A single metric allows firms to track performance over time, compare different campaigns and compare performance across brands. Certainly, firms need to drill down from this single metric to understand factors contributing to performance once they have the initial metric.

The model looks like this:

ROI = amplification X sentiment X marketing intensity X close rate

Let’s look at each factor and why they are included in the model:


Amplification increases awareness of your brand. But, more important, a share is an implied endorsement of your brand by folks who most influence buying decisions –  friends. Shares also morph a brand’s image based on characteristics of who does the sharing.

Sentiment Analysis

Sentiment analysis measures your brand image – do folks like it or hate it?  Obviously, folks buy brands they like and, by extension, brands their friends like.

Marketing Intensity

Here, we include marketing efforts like coupons, traditional and online advertising spend, maybe some overall measure of content marketing efforts such as number of posts and other factors representing marketing activities.

Close Rate

Your close rate includes conversions, but might also include some other conversion-type factors such as your CTR (click-through rate) for your emails or online advertising, although these might represent your conversion.

Using the Four-Factor Model

First, you can weight any factor in the model as you see fit. Second, you can weight individual elements of each factor. For instance, you might weight sales more than requests for information or other types of lead generation.

You might also add additional factors to the model, such engagement (e.g., comments), weighting actions by influencers based on their Klout score or other mechanism or weighting elements based on the size of the network so that Facebook has a higher weight than Pinterest.

See more at: What’s the ROI of Social Media?