10 Social Media Marketing ROI Statistics You Need to Know in 2024

As we enter 2024, social media will continue its stronghold on companies looking to connect with their audience, establish their brand and drive growth. But how can you be certain that your social media marketing efforts are paying off? This is where return on investment (ROI) comes into play. 

In this blog, we'll walk you through some of the important social media marketing ROI statistics that can help you streamline your social media operations and get the most out of your marketing budget. Not just that, we also hope the information covered will help you better attribute your social media marketing ROI, regardless of whether you're a seasoned marketer or just dipping your toe in the water. 

But first, let's start with the basics. 

What is social media marketing ROI? 

Social media marketing ROI measures the effectiveness and profitability of your marketing efforts on social platforms like Facebook, X (formerly Twitter), LinkedIn, Instagram and others. It calculates the revenue generated from social media activities, such as content creation, targeted ad campaigns and audience engagement, in relation to the amount of time and money invested in those activities.  

Essentially, it answers the critical question: "Are you getting more out of your social media marketing than what you're putting in?" 

Importance of social media marketing ROI

Social media marketing ROI measurement is crucial for an array of reasons, some of which are mentioned below. 

Budget allocation 

It promotes strategic financial planning by pinpointing the most profitable platforms and campaigns, enabling companies to allocate their resources more effectively and efficiently. For instance, an online boutique may discover that their Instagram ads drive more sales compared to X with the help of data analytics and reporting tools, thereby reallocating more of its budget to Instagram for better social media returns. 

Performance evaluation  

It results in continuous improvement of campaigns by offering valuable insights through metrics like engagement and conversion rates. These metrics help align social media efforts, such as content marketing and community building, with company goals like increasing brand awareness and boosting sales. For instance, a small online artisan bakery may notice that posts about their baking process receive higher engagement and lead to more website visits, helping them focus on creating more behind-the-scenes content. 

Accountability 

It helps in developing a culture of data-driven decision-making by holding marketing teams responsible for the results of their work. For example, as a marketer you can set clear targets for your social media ad campaigns and use ROI metrics to evaluate and report their performance to stakeholders, ensuring transparency and accountability. 

Value Demonstration 

It enables marketers to present executives and investors with evidence of the effectiveness of social media marketing. For instance, an online tech gadget store can compile its quarterly ROI statistics to show how its Facebook campaigns have increased brand awareness and sales, validating the continued investment in its social media strategy. 

Deep Dive: How to measure social media engagement effectively 

Without further ado, let's now examine the 10 social media marketing ROI statistics that can have a tremendous impact on your business decisions this year. 

10 social media marketing ROI statistics every marketer must know

The top 10 social media marketing ROI statistics that you should be aware of as a marketer are listed below. 

1. The dominance of video content

Video content continues to pull audiences on social media. By 2025, video content is expected to account for 82% of all consumer internet traffic. This underscores why you need to include video in your strategy to effectively engage your target audience on their preferred social media platforms. 

Additionally, videos frequently have better engagement rates than text-only posts and can, thus, have a significant impact on your ROI. 

2. Increase in ephemeral content 

Ephemeral content, which includes Stories on platforms like Instagram, Snap and Facebook, is becoming more popular. There are more than 500 million daily active Instagram Stories users. Marketers have welcomed these short-lived posts because they foster user engagement and a feeling of urgency, which ultimately results in increased conversion rates and ROI. 

3. The power of social commerce

Social media platforms are taking social commerce seriously. According to Statista, the value of social commerce sales worldwide is expected to reach $1,698 billion in 2024. Marketers can take advantage of this trend by using tools such as "Facebook Shops" and "Instagram Checkout" to facilitate sales directly through their brand’s social media pages.  

Quick Tip: Wondering how to create an engaging omnichannel experience for your customers at every touchpoint? Sprinklr's conversational commerce platform enables full conversational journeys across the 30+ messaging, live chat, social and app channels your customers prefer — helping you create premium commerce experiences at every touchpoint on their journey.  

4. The importance of micro-influencers

Influencer marketing has been around for a while, clearly establishing how beneficial the audiences of these influencers can be for businesses. 

It's no wonder that social posts created in collaboration with micro-influencers had 60% higher engagement rates. Compared to mega-influencers, who possess larger but less engaged audiences, working with micro-influencers can be more cost-effective and result in a greater ROI. 

5. The prevalence of user-generated content 

User-generated content (UGC) is an effective tool for promoting authenticity and cultivating trust, and in some ways is more effective than influencer content.  

Last year 90% of customers reported that UGC has greater influence on their purchase decisions than conventional advertising. In addition to lowering marketing-related expenses, encouraging your followers to produce content about your company or its products can improve your bottom line significantly. 

6. The need for social listening

Understanding your audience and their needs is essential for any marketing plan, which is why social listening is so important. 61% of businesses today employ social listening. Additionally, more than 82% of marketers view it as a crucial planning component of their social media strategy. You can create high-converting marketing and advertising campaigns by monitoring and analyzing online conversations. 

7. The impact of chatbots and AI

Chatbots and artificial intelligence (AI) together have a considerable impact on social media marketing. Chatbots can accelerate the buying process, respond to questions from customers and provide tailored suggestions, all of which can increase customer satisfaction and ROI. In fact, recent studies predict that AI will be used in 95% of all customer interactions by 2025. Additionally, customer issues may be resolved more quickly, and providing resolution will become less expensive with conversational AI and bots. 

Quick Tip: Despite their best efforts, are your agents not able to field all customer queries? Sprinklr AI+ can help improve self-serve rates, along with overall resolution rates, with deeply contextual and relevant responses powered by conversational bots.  

8. The problem with ad blockers

Ad blockers continue to be a concern for marketers. In 2022, the number of ad blockers on the internet surged by 27%. To ensure that your campaigns are viewed by your target demographic, your marketing team needs to focus on generating less intrusive, more relevant and engaging advertisements. 

9. The growth of personalization

In social media marketing, personalization has the power to drive results. Companies that provide personalized experiences increase the likelihood that 80% of their customers would make a purchase again. Your ROI may be dramatically impacted by leveraging data and automated solutions to deliver personalized content and recommendations. 

10. Return on ad spend (ROAS)

Calculating ROAS is essential to determine how effective your social media advertising campaigns are. And there’s one social platform in particular that can help you increase your success rate: in a recent survey 95.8% of marketers claimed that, of all social media platforms, Facebook had the highest return on investment.  

Read More: Social media ROI: How to measure and improve your ROI 

How can businesses calculate their social media marketing ROI?

Here are five strategies to calculate your social media marketing ROI, along with some recent data to help you plan your activities. 

1. Track conversions and revenue

Before calculating social media marketing ROI, you should be on top of your organization’s conversion and revenue details.  

• Leverage UTM parameters: Use UTM (Urchin Tracking Module) parameters to make it simpler to determine the source of your website traffic. UTM parameters let you establish distinctive tracking URLs for each social media post. A Google Analytics tool can assist you in creating UTM parameters for your URLs. 
• Create conversion goals: List specific website actions, such as form submissions, product purchases or email sign-ups, that indicate a successful conversion. To track these actions, use analytics tools which can also enable you to establish personalized conversion targets. 
• Enforce tracking: Integrating monitoring in Google Analytics or your preferred analytics platform will help you directly attribute sales from social media sources especially if you operate an online store. 
• Calculate ROI: After gathering information on sales and conversions, you can determine your ROI by deducting the costs of your social media marketing campaigns from the revenue generated. ROI is calculated using the formula: [(Revenue - Cost)/Cost] x 100

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2. Customer lifetime value evaluation

It is crucial to comprehend how your social media marketing efforts will change over time. The customer lifetime value (CLV) metric estimates the total income a customer is anticipated to produce over their tenure as your customer. To consider CLV for your ROI calculation, do the following. 

• Analyze historical data: To calculate the average CLV for your customer base, start by reviewing your previous customer data. 
• Attribute social media influence: Determine the percentage of CLV that can be directly ascribed to your social media marketing efforts. To trace the customer's journey correctly, we can leverage AI-powered analytics tools. 
• Calculate ROI with CLV: Include the CLV in your formula for calculating ROI to get a more thorough understanding of the long-term effects of your social media marketing efforts. 

3. Measure social media engagement

Measuring social media engagement is important since social media ROI includes engagement, brand recognition and customer loyalty in addition to sales. Here’s how you can quantify these intangible characteristics. 

• Engagement metrics: Engagement indicators, such as likes, shares, comments and clicks, can be used to gauge how well your content is received by your target audience. To keep track of these analytics, make use of applications like X Analytics, Instagram Insights and Facebook’s Audience Insights. 
• Sentiment analysis: Use sentiment analysis tools to determine the general tone of online discussions about your brand. While negative sentiment may point to potential problems, positive sentiment signals your brand’s solid reputation. In our latest guide, you can learn more about social media sentiment analysis. 
• Social listening: Rely on AI-powered social listening tools to keep track of any mentions of your company, products or services on social media. This will help in gauging how your target market views your brand and its products. 
• Calculate engagement ROI: Calculate the return on engagement by giving each type of engagement a monetary value and including it in your ROI calculation. For example, a share may be worth more than a like.  

4. Analyze cost-per-click (CPC) and cost-per-conversion

Social media marketing frequently entails paid advertising, thus examining CPC and cost-per-conversion data can help you gather important information about your ROI.  

• Track CPC: Track your CPC by figuring out how much each click from your social media advertisements costs. CPC information is provided by websites like Facebook Ads and Google Ads. 
• Determine cost-per-conversion: Find out how much it costs to use social media advertising to generate leads or close sales. Divide the total ad spend by the number of conversions. 
• Compare ROI across platforms: To figure out the most cost-effective social media channels for your company, compare CPC and cost-per-conversion across several social media platforms. According to WordStream, the standard CPC on Facebook is $1.72. 
• Modify ad campaigns: Use this information to improve your advertising campaigns. Consider reallocating your spending if you discover that one platform has a considerably cheaper CPC and cost-per-conversion than another.  

5. Use attribution models

Attribution models can assist your company in understanding how various customer touchpoints impact conversions. This path frequently involves social media marketing and applying attribution models can offer a more accurate picture of your social media marketing ROI. 

• First-touch attribution: According to this approach, the conversion was the result of the user's very first touchpoint with your brand. The social media platform gets credit for the conversion if the user first learns about your company from one of its social media advertisements. 
• Last-touch attribution: This approach gives credit for the final communication prior to the conversion. The corresponding social platform gets all the credit if a user clicks a social media ad and subsequently makes a purchase. 
• Multi-touch attribution: This approach assigns points for all customer journey touchpoints. It offers a comprehensive view of how social media affects conversions. 
• Data-driven attribution: Cutting-edge attribution methods employ machine learning to assign credit based on the significance of each touchpoint in the overall journey. The most precise ROI evaluation may result from this approach. 

Also Read: How to create a social media marketing strategy from scratch  

Final thoughts  

As social platforms continue to evolve, you must keep up with the latest statistics and trends to maximize your use of social media. Although these statistics offer insightful data, keep in mind that social media marketing success is also determined by the sincerity of your brand, the resonance of your message and the deep connections you build with your audience.  

ROI means so much more than just revenue; it also includes the networks you create and the credibility of your brand among users. Through performance indicators, campaign monitoring, comparison analysis and AI-enabled reporting and analytics features, Sprinklr Social can help you determine the efficacy of your social media marketing activities. You can also optimize your social media strategy, drive meaningful engagement and accomplish your marketing goals with Sprinklr. 

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