Is there a ROI for Social Media?

Spiros Tsaltas

We all witness constantly this ‘craze’, mesmorization and obsession with Social Media. Every year, more and more billions of dollars are spent worldwide on amazingly elaborate efforts to establish and maintain a social media presence; and this number of billions of dollars is going to increase every year, especially with live-streamed videos in Social Media – think of the Red Bull ‘event’ of live-streaming the gentleman who set the world record by skydiving from 128,000 feet.

But, is there really any ROI at any Social Media investment?

(FYI: Almost in all Social Media ROI Studies, people chose to use Facebook because it is the most dominant social network. Also, Twitter advertising is ‘almost new’ and one can assume that Facebook findings would apply to most of the other popular platforms as well.)

How important is a ‘Like’?

I was reading a few months ago: ‘What’s the Value of a Like’ at the March -April 2017 issue of the Harvard Business Review.


The published results were clear:

  1. Social Media ‘Likes’ do not affect a customer’s behaviour or lead to increased purchasing. Put another way, liking a company that offers flu shots does not translate into going and getting a flu shot.
  2. Liking a brand on Facebook had no enhancing effect on the purchasing habits of friends.
  3. The good news is that there is a way to convert ‘Likes’ into sales, and it’s straight out of the 20th-century marketing playbook: advertising.
  4. Facebook posts indicating that a Facebook friend is using a product—not just that he or she likes it—increase the chances that a member will use the product too. The effect is pronounced when product- users send their friends personal messages of recommendation (This tactic can raise privacy issues – this is why Facebook discontinued its social ads—the ones showing the profile pictures of friends who like the product at hand).

This is basically the ‘old traditional referrals- advertising’

  1. If a brand decides not to spend money advertising, it can use its social media channels to gain intelligence from its most loyal customers. Almost by definition, the people who go to the trouble of finding a brand on social media, they will be its most devoted, and thus most valuable, customers. These customers are a great asset: they will enthusiastically provide feedback to improve product development, management, and delivery; defend the brand against unjustified complaints; and be early- adopters of and evangelists for new offerings.

What does all this mean for marketers? Just “pull marketing” (companies try to ‘pull’ customers in through social media and other channels) is not enough on its own to result into sales- lead. You still need to also use/ utilize the old & ‘traditional “push marketing” (companies promote and advertise their goods and services).

So, what is the real Business Value of Social Media?

According to the State of the American Consumer: Insights for Business highlighting findings from Gallup’s comprehensive ongoing study of the American consumer from 2008 through 2014:

  • 62% of U.S. adults who use social media say these sites have no influence on their purchasing decisions and only
  • 5% say they have a great deal of influence.

I hope that you do understand that just because your organization buys for example 100.000 Twitter Followers or a 100.000’Likes’ or 100.000 fake reviews (statistically one in 3 reviews is fake), all these will not translate into sales or any other form of ROI.

Also, just because you tweet or ‘facebook’ something, it does not mean that all of your audience will ‘see’ it. Actually, Twitter has turn into such an overwhelming experience for most users that they take deep breaks from using it. Even most ‘trend- predicters’ expect Twitter to be less significant in 2018.


A Nov 2014 Forrester study found that:

  • posts from top brands on Twitter and Facebook reach just 2% of their followers (note: that’s followers, not new customers) and
  • only 0.07% of those followers actually interact with those posts.

Other recent research studies have found out that traditional offline consumer opinion surveys (when they use representative samples), are better at predicting sales than clicks, number of website visits or page views, positive or negative social media conversations.


The famous 2014 comScore Study, indicated that more than half of online display ads appear on parts of a web page that are not viewable. In other words, hope that “only” 50% of your intended ads are not seen by anyone for at least a second!

Social Media ROI
If you google it, the internet is full of advice on how to develop models and how to calculate any Social Media ROI. And they all give great modelling advice but fail sort in calculating actual ROI Values – you know, the ones with ‘numbers’.

The reality is that most companies do not have the right measures for their Social Media investments (they rarely even have any ROI measures and KPIs) or they measure social ROI in a vacuum. But to justify an investment by activity and not outcomes is a tautology — we advertise because we advertise — and not a meaningful business argument; that is wrong business practice.

People -including Marketers of course- tend to get overexcited and hyped about new technologies and they do misallocate resources in desperate acts of wishful thinking, resulting in a completely wasteful use of Social Media.

And people tend to compare Social Media to PR: another area where companies often spend lots of money but without any clear, focused or verifiable objectives.

Maybe we should forget all traditional ROI and focus on firstly understanding the consumer usage of social media instead of calculating the returns in terms of customer response.

“If you’re measuring social media on ROI, you already don’t get it.” (author unknown)

And the reality is…
Like with anything new, with Social Media too, great expectations are common and missing the goal is understandable: it takes time for both practicing/ using new tools and learning their optimal usage.

You might have heard it: that “the beauty of Social Media is that it can generate engagements.” But:

  • Can it?
  • How often?
  • How much?
  • In what circumstances?
  • Does Inbound Marketing really work?
  • How can it work for your organization?


At present, there are just weak and often non-existent links between social media activity and consumer behaviour.

It seems that for most people, Social Media might be “really” more about awareness, not sales. Please have a look at the image attached to this article.

According to the most recent 2016 DMA Social Media Survey ( – both images in this article are extracted from this study), less than 10% believe that ‘they can see a return on investment using Social Media.


Don’t get Confused: BT and KLM

#1 BT’s £2m savings ( “BT managed to save £2m per year by routing around 600,000 contacts per year through social media instead of its call centres. This also improved the customer experience, as these people preferred to deal with BT via social instead of phone or email”.

#2 KLM €25m savings: The Dutch airline saved all that by using Twitter for customer service. I talked to friends involved in that and it is really about streamlining and change in Customer Operations. Btw, they also use Facebook Messenger too nowadays.

#3 A few other ‘similar’ cases

What is really behind all these, is using Social Media as a vehicle to deliver a specific service and not using Social Media solely for Marketing, Brand Awareness, Sales Leads Generation/ new Customer Acquisitions or Customer Engagement (besides Customer Support).

So, treat these cases as an exception please – more likely as a separate category on its own, one far away from ‘common’ marketing.


In Conclusion
Business success requires linking customer-acquisition efforts with a coherent strategy. So, make sure that you do have a clear Strategy relating to your expectations for Social Media and its ROI which as a corporate expenditure should be measured, monitored and justified. And, embrace the Customer Loyalty notion.


Maybe there is no point of … worrying/ thinking about “what’s the ROI of ….precisely calculating ROI?”.


And maybe, Social Media is not about customer acquisition, but all about Customer Loyalty and Retention?


Sure, you should invest in Social Media, but do it wisely and consciously. And, may I kindly suggest that you -please- focus on Organic Growth?

Thank you and Good Luck,


About the Author: Spiros Tsaltas, a former University Professor, is the Principal at a unique Customer Loyalty Start-up: HireLoyalty ( – based in Accra, offering both Consulting and Training in anything relating to Customer Loyalty.

As a NED (Non-Executive Director), Spiros is also associated with HIREghana ( ) and he can be hired via them (+233 50 228 5155).

Spiros welcomes all your comments/ remarks/ feedback /suggestions at Press [at] HireLoyalty can be reached at +233 20 741 3060 or +233 26 835 2026


© 2018 Spiros Tsaltas and © 2018 HireLoyalty 

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