The issue of ROI for social media is always a hot topic, and the creative answers to the problem are always entertaining. As an ad man, I always find it funny how people invent any method to make ROI seem like an outdated or insufficient measurement of success in social.

Seriously? I mean, that’s the reason we do anything in business. We are in it to make money, aren’t we? And we certainly want to make more than we’re spending.

Still, the ROI of social media is a hot topic, precisely because it’s important and quite elusive. In an effort to further the discussion, I want to share three angles (data, content, and advertising) I use to recognize the return on social media efforts.

The ROI of social data

Every company has some sort of budget for data gathering. For some, it is lumped into the retainer with their agency, while for others it is the amount of money they put into their email campaign and sign-up process. Still, at the end of the day every business owner knows that the better they know their clientele, the more easily they can adjust their product and culture to accommodate consumer needs and desires.

Social media, and Facebook in particular, provides an amazing resource.

Facebook’s Open Graph allows users to see all activity for public Pages. And you know what…your Page and your competitors’ Pages are public.

FB graph api

From this tool, you can identify promoters and detractors of your brand or your competition, who your top fans are, who your biggest influencers are, and what they talk about when they talk about you or your competition.

This data is invaluable. With it, you can build customer look-alike models to identify common likes among your top fans, and reward individuals for their loyalty and sharing. You can identify people who are dissatisfied with your competition, and identify why.

While you are at it…send ads directly to them via Custom Audience Targeting. Further, you can better target your social content strategy around the topics and concerns of your fans and those dissatisfied with your competition.

FB custom audience targeting

The question of ROI here is this: “By being on point and targeting most likely customers, what is the differential on media spend pre-Data vs. post-Data to get a similar result?” It’s a question of savings vs. potential or previous losses.

To figure this out, you can determine how many impressions your budget would buy. From there, given a broader, less targeted audience, how many times would they see the ad? Now, how many times will your current target audience see the ad? Now, how much would it cost for the broader audience to see the ads the same number of times?

The more qualified the audience, the more easily they are targeted and the more easily converted. How much are you wasting without this data?

The ROI of social content

As hinted in the last point, social media provides its own feedback structure that helps brands tap into trends, hot topics, and viral streams. This allows brands to accomplish what only the big brands could afford in yesteryear, and tap cultural undercurrents to identify promotional opportunities or lucrative business partnerships.

One of the things our clients get most excited about is that we can identify charity partnerships that their fans are already backing. It allows for less waste and fewer business partnership failures.

What is the ROI on knowing which business partnerships would be most lucrative, or partnering with a charity closely associated with the fans of your competitor before your competitor even knows it’s related? The ROI of social media is tied not only to traditional advertising ROI metrics, but also to the ROI measurements of partnership and acquisitions, creative messaging, brand communications, and other branches where ROI is determined differently and in conjunction with other campaign elements.

Once again, here you can use the equation above to see how much money is being saved, or follow a straight-ahead cost per acquisition analysis against your business partnership. But, one thing is for sure, it is fundamentally measurable.

The ROI of social advertising

Social media is a treasure trove of information tied to the media shared. In other words, Twitter is a dynamite resource for trends globally and locally, because of the nature of the media it shares. Facebook is person-centered, and therefore its treasure is in personal data.

Social media can be hugely successful for ROI – and highly measurable, so long as you are creative about how to determine it.

With Facebook’s Ads Tool, you can target down to zip code. If you have emails or phone numbers, same thing. This gives you an extraordinary precision when it comes to ad placement. What else? It gives you a dynamite method to do A/B testing to determine ROI.

One simple way to gauge ROI in social media advertising is to send ads to certain areas, and withhold them from others. If you are locally based, targeting zip codes will work fine here; you simply have to ask for their zip code on purchase. Then, compare the control zip codes with the active ad zip codes. This works nationally as well; just change zip codes to states.

The most amazing part of social media advertising is that it runs recon while it’s working. In other words, you get ROI and you get amazing data. If you keep the ad campaign well sorted in the Power Editor, you can gain great insights into your market, how it behaves, and who is responding and in what ways. Amazing!


Social media ROI isn’t so difficult to determine as it seems at first glance. The struggle with social ROI is that it bridges so many business disciplines that it’s easily minimized to one business vertical, and thereby underutilized – or so broadly used that it is similar to determining the ROI of a desk.

Modern companies are built to perform at such a high level by having experts in each narrow field of expertise. And that is great, unless you are trying to measure the usefulness of a tool that benefits each vertical in a very different way.

By clearly defining the many ways in which you are using (or could be using) social media, you can more easily achieve a defined ROI for every discipline within your company, and combine those findings to create a global ROI for your social efforts. The methods above are three options, but there are many more. The key is to tie the ROI calculations to each vertical, and judge social by the same standard as other elements in the vertical. Doing this, it may shock you just how strong social is for ROI across the board.

– Cody Vest

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Cody Vest
Cody Vest is the creative director at Vest Advertising in Louisville, KY. A second-generation Ad Man, he bridges the gap between digital data and ad strategy building campaigns across every kind of media outlet from Facebook to broadcast TV. Cody's interests include building easy ways to get key marketing data from the open systems of the social web, and strengthening traditional campaigns with digital insights.