What is ROI?

ROI, or return on investment, is a measure of how much value you get back from social media compared to the time and money you put in.

ROI helps you decide whether your social media efforts are worth it. Knowing your return lets you justify budgets, choose the best channels and stop spending on things that do not work. For small businesses with limited time, it is a key reality check.

A basic ROI formula subtracts your costs from the value you earned, then divides by the costs. Costs can include ads, tools, freelancers and your own time. Value can be sales, leads, bookings or other goals you can link to social media. Tracking links, promo codes and sign-up forms help connect results to specific posts or campaigns.

Decide what success looks like before you start, such as leads or online orders. Track both money spent and hours worked. Review ROI over months, not days, because brand building takes time. Compare channels to see where your effort pays off best.

Example

A catering company tracks how many event bookings come from its Facebook posts to see whether social media is worth the hours it spends.