1 Free ROI tool to make social media marketing relevant for your cynical boss

You know what I’m talking about: you’re working for this backwards company, with a boss who “kinda knows” marketing is relevant, but doesn’t really invest on it. You think the boss doesn’t understand it at all. You want to move on, probably go to a startup which appreciates marketing and “growth hacking” better instead of thrashing around in your lame traditional business.

Hold up. It doesn’t have to be that way. At the end of the day, what your boss wants are measurable results. Marketing isn’t that fluffy of an activity to be like. What you need to present is clear ROI. X facebook spend generates Y revenue. Z twitter spend generates A revenue. And tell you what: in my experience working for one of the largest advertisers before, social media marketing has superior ROI than offline marketing. I’ll show you a simple and free way to do it.

You only need to gather the following ingredients:

  1. A tool that allows you to do regression analysis (like this online tool)
  2. Spending data across all marketing mediums (eg. TV, radio, print media, social, etc.)

You don’t need to study statistics to understand regression analysis. I’ll take you through the process and I’ll help you explain the results.

Now, when you open up the link, it will show you this:


The number of data points: can either be the number of months or number of weeks. What matters is that you define the length of the campaign and you determine a way to split that campaign into observable pieces

The number of variables: the number of marketing mediums the business uses AND revenue. So if you have TV and Social as mediums then you have 3 variables.

Let’s say you have 10 data points and 3 variables. Once you click “OK”, you should see the table below:


Let’s now fill it up with some sample data:


Click “calculate”, and you should see something like this:


This is how you interpret it:

  • For every unit increase in X1, there is a corresponding ~1.9 unit increase in Y.
    • Translation: 1.9 ROI for TV
  • For every unit increase in X2, there is a corresponding ~5.8 unit increase in Y.
    • Translation: 5.8 ROI for Social

The constant at the end (ie. “4875”) is the margin of error. For example, if we take the ROI numbers in the regression model as is, if we spend $30k on TV and $20k on Social, we get a predicted revenue of $173k +/- $4.8k.

Now that you got multilinear regression down pat (fist bump!), show it to your boss to get extra support for your investment plans!

*Note: all this advice has been for outbound marketing. Do you want to know how I approach calculating the ROI for design changes? Sign up below and I can teach you how!