What is social media ROI?
Also called ROI, return on investment, social media return on investment.
Social media ROI (return on investment) is the value a business gets back from social media compared with what it spends on it, including time, tools and ads: (value gained minus cost) divided by cost, times 100.
Why it matters
ROI answers the question owners actually ask: is this worth it? It forces you to count the real costs, especially your own time, and to connect posts to outcomes such as sales and bookings rather than likes.
Example
In a hypothetical month, a gift shop spends 10 hours on social media (valued at $20 an hour, so $200) plus $100 on a boosted post: $300 in total. Orders traced to social media bring in $900 of profit. ROI = ($900 − $300) ÷ $300 × 100 = 200%.
How to calculate it
Use profit (or gross margin) rather than revenue if you can, because a $100 sale that cost $70 to make is not $100 of return.
- Add up the costs for the period: hours spent multiplied by an hourly value, tool subscriptions, ad spend, and any design or freelance costs.
- Add up the value: profit from sales you can trace to social media through UTM-tagged links, codes, or customers telling you how they found you.
- Subtract the cost from the value.
- Divide by the cost and multiply by 100.
- Repeat over several months, because one month is often too short to see the effect.
Where the numbers come from
Social platforms report clicks and views, not your profit, so ROI is built from your own records: website analytics with UTM parameters for online sales, your till or booking system for offline sales, and your accounts for costs.
Some value is real but hard to price, such as answering questions publicly or staying visible to past customers. Note it alongside the number rather than inventing a price for it.
Keep the calculation simple enough to repeat every month. A spreadsheet with four columns (month, hours, money spent, value traced) is enough. Consistency over time tells you more than a precise figure for one month.
What's a good number?
Any positive ROI means social media returned more than it cost, but what counts as good depends on your margins and how it compares with other ways of spending the same time and money. Compare your social media ROI with your own alternatives, such as flyers, local ads or email, measured the same way.
Common mistakes
ROI is often overstated or understated because of:
- Leaving out the owner's time, the biggest cost for most small businesses.
- Counting revenue instead of profit.
- Giving social media credit for every sale in a month when it ran, or no credit for sales it helped but didn't close.
- Judging a long-term activity on a single month.
Common questions
Can I measure ROI if I don't sell online?
Yes, approximately. Ask new customers how they heard about you, use social-only offers or codes, and track enquiries that start in messages. It won't be perfect, but it is far better than guessing.
Should I include my own time in the cost?
Yes. Hours spent on social media are hours not spent elsewhere. Value them at what you would pay someone else to do the work, or at what your time is worth to the business.
How long before social media shows a return?
It varies by business, platform and how much you post, so there is no fixed timeline. Track costs and traced value monthly from the start, and judge the trend over at least a quarter rather than a single month.
Source: URL builders: collect campaign data with custom URLs (Google Analytics Help), checked 14 October 2026