What IS Your Social Media ROI?

I came across an article from the badasses over at The American Genius called ” Study says investing in social media ads ROI is all a hoax.” And I read it, and I fumed, and then I laughed. It amazes me that after all the years of using and studying social media, people are still doing the same stuff, making the same mistakes, and blaming social media as a fake, phoney, hoax. So let me share some things with you that I share with all of my clients.

First, let’s talk about ROI, which means Return On Investment. In other words, what are you getting back for what you are putting out.


Let’s get one thing straight; money isn’t the only investment or the only return.

Yeah, that’s what most businesses think of first (since you need money to stay in business) but it’s not the only currency. And if you aren’t sitting down and setting goals and expectations about what your client should be getting out of social media, then you are doing them and yourself a grave disservice.Sit down with your clients (or team) and ask the question “What does social media success look like?” Because you might surprised at the answer. It might be something as simple as “I want people to see our page and know that we’re real professionals” or even “I just need more people on the mailing list” and yes “I want to sell more stuff/services/products.” Your job is to make sure their social media work is aimed at those goals. And sometimes that means redirecting their efforts.

Remember back in the day when Facebook was about to go public and GM announced that they were canceling their Facebook advertising because it didn’t work? At the time, it seemed like it would be a big blow to FB’s IPO, but personally, I just laughed. Because what idiot at GM thought they were going to sell cars through a Facebook ad? (PS – GM totally started running ads again in 2013) In my experience, Facebook ads are good for four things:

  • Facebook actions (likes for the page, engagement, reach, etc)
  • Clicks to a link (join my mailing list, get this free white paper, check out our new post, etc)
  • Retargeting (following users around with that product they just looked at on your site)
  • Funny T-shirts and knock-off sunglasses (impulse purchases)

People generally aren’t¬†sitting on Facebook, looking at an ad, and buying a car/¬†signing a contract for a $5,000 a month business service/booking a $10,000 luxury vacation.

So if your client is a real estate agent and says “I want to use FB/Instagram ads to sell my listings,” it is your job to say “That’s not how this works. You can drive traffic to the listing. You can make some cool videos of the house to share; but you aren’t going to sell a house from an ad on Facebook. No one is going to click to buy a house. And also, your site isn’t set up to click to buy a house. So there’s no way to measure that.” Tough to hear (and say) but true.

Social Media Measurement

Facebook (and really all social media) is an amazing tool for lead generation, customer service, engagement, and brand building. But it’s the top of the funnel, not the bottom. It’ll get eyes on your stuff, and it will help build trust and reputation, and it’ll keep you in the forefront of people’s minds…..all things that factor in to people making decisions to purchase. And that has a great deal of value.

So before you write off social media as a “failure” or a “hoax,” make sure that you are really defining what success means.