How to Calculate Social Media ROI (With Real Formulas)

"What's the ROI of social media?" It's the question every marketer dreads — not because the answer doesn't exist, but because most people measure the wrong things.

Follower count isn't ROI. Likes aren't ROI. Even impressions aren't ROI. ROI is revenue generated relative to the cost of generating it. Period.

Here's the exact framework we use to measure social media ROI for every client we work with.

The Social Media ROI Formula

At its simplest:

Social Media ROI = (Revenue from Social - Cost of Social) / Cost of Social × 100

If you spent $5,000 on social media marketing last month and it generated $20,000 in attributable revenue:

ROI = ($20,000 - $5,000) / $5,000 × 100 = 300%

Simple, right? The hard part is accurately calculating those two numbers.

Calculating Your True Cost

Most brands undercount their social media costs. Your true cost includes:

• Agency or team salaries — prorated hours spent on social
• Ad spend — every dollar spent on paid social campaigns
• Tools and software — scheduling tools, analytics platforms, design software
• Content production — photography, videography, editing, copywriting
• Influencer payments — fees paid to creators for branded content

Add all of these up. That's your real monthly cost. Don't skip anything — an honest cost calculation is essential for accurate ROI.

Tracking Revenue Attribution

This is where most brands fall apart. Revenue attribution for social media falls into three categories:

1. Direct Attribution (Easiest to Track)

Revenue that comes directly from a social media click:

• Someone clicks a link in your Instagram bio and makes a purchase
• Someone clicks a product tag in a post and buys
• Someone converts through a paid social ad

Track this with UTM parameters on every link, plus platform-specific conversion tracking (Meta Pixel, TikTok Pixel, LinkedIn Insight Tag).

Formula: Direct Revenue = Sum of all purchases from social-referred traffic

2. Assisted Attribution (Harder but Critical)

Social media often plays a supporting role in the customer journey. Someone might discover your brand on TikTok, research you on Instagram, then convert through a Google search two weeks later.

In a last-click attribution model, Google gets the credit. But social media started the journey.

To track this:

• Use Google Analytics multi-touch attribution models
• Track "assisted conversions" where social was a touchpoint
• Look at time-lag reports to see how long social-first visitors take to convert

Formula: Assisted Revenue = Purchases where social was a non-last touchpoint × attribution weight

We typically assign 30-40% credit to the first touchpoint and distribute the rest across other channels.

3. Brand Lift (Hardest to Track, Most Valuable Long-Term)

Social media builds brand awareness and trust that drives revenue through every channel — not just social. When your organic social makes more people aware of your brand, your Google ads perform better, your email open rates go up, and your sales team closes faster.

Measuring this directly is difficult, but proxies include:

• Branded search volume over time (track in Google Search Console)
• Direct traffic growth
• Email list growth from social sources
• Survey data: "How did you hear about us?"

The Metrics That Actually Matter

Not all social media metrics are created equal. Here's our tier system:

Tier 1: Revenue Metrics (Most Important)

• Revenue attributed to social
• Cost per acquisition (CPA) from social
• Return on ad spend (ROAS) for paid campaigns
• Customer lifetime value (LTV) of social-acquired customers

Tier 2: Pipeline Metrics

• Leads generated from social
• Email signups from social
• Website traffic from social
• Conversion rate of social traffic

Tier 3: Engagement Metrics

• Saves and shares (these indicate high-value content)
• Comments (real conversations, not emoji spam)
• DM inquiries
• Click-through rate on links

Tier 4: Vanity Metrics (Least Important)

• Follower count
• Likes
• Impressions
• Reach

Vanity metrics aren't useless — they're context. But they should never be your primary success metrics.

Building Your ROI Dashboard

Here's what we track in our monthly client reports:

A Real Example

Here's a snapshot from one of our DTC clients:

• Monthly social media cost: $7,500 (agency + $3,000 ad spend)
• Direct revenue from social: $18,200
• Assisted revenue (40% attribution): $8,400
• Total attributed revenue: $26,600
• ROI: ($26,600 - $7,500) / $7,500 × 100 = 254%

For every dollar spent on social media, they got $3.54 back.

Start Tracking Today

If you're not tracking social media ROI right now, start with the basics:

1. Install UTM parameters on every social link

2. Set up conversion tracking pixels on your website

3. Connect your analytics to your revenue source (Shopify, Stripe, CRM)

4. Calculate your true monthly social media cost

5. Run the ROI formula at the end of each month

You can't optimize what you don't measure. And once you can prove ROI, getting budget for social media becomes a lot easier.