How important is engagement with Facebook pages when it comes to return on investment from advertising on the social network? Not very, according to a new report by social marketing solutions provider SocialCode.
SocialCode described two campaigns it ran for a company it described as “a Fortune 100 health and beauty company,” saying that the advertiser wanted to lower cost per thousand impressions while at the same time slashing cost per engagement.
In the first campaign, SocialCode said it switched from optimizing for engagement to optimizing for reach, slashing CPM by more than 13 times with little effect on CPE efficiency.
And in the second campaign, SocialCode surfaced the best creative through engagement, and then switched to reach optimization to lower CPMs by 44 percent, finding that although it increased its engagement rate slightly when compared with the broad audience, it was still able to cut CPE by 44 percent.
The company said in summarizing its findings:
For branding campaign ROI, engagement optimization isn’t the best bet. The challenge comes with so-called “engagement metrics,” which are a red herring for the world’s largest advertisers on Facebook and other social platforms. While many advertisers and agencies for large brands optimize for engagement, “audience reach” is a much better objective that leads to offline sales. However, engagement metrics still are important in order to identify effective creatives and content, which can then be applied to achieve audience reach objectives.
Organic reach for brands is declining as competition for attention rises. This means that advertisers with branding and awareness objectives must now pay to reach their fans on Facebook (or followers on Twitter). But there are bigger reasons to advertise on social: to go beyond core fans and followers acquisition and take advantage of unprecedented capabilities in audience reach, targeting, and measurement, not to mention powerful new ways of brand storytelling.
But simply spending money is not enough. Because of the sharing/viral nature of social ads platforms, there can be a tremendous difference in paid media performance based on the quality of the creative/content. If a creative unit has vastly more propensity to be shared, then promoting that creative will result in additional “viral lift” beyond the core paid media. In addition, this will help lower cost because higher-quality content tends to lower the cost (CPM) in a bidding platform, similar to Google. This can result in an “effective CPM” that is radically lower.
We’ve found that the best way to do this is to optimize toward engagement to surface the best creatives, and then shift to reach optimization of those creatives. This method not only enables advertisers to capitalize on social sharing, but the focus on reach creates both scale and parity with other media channels.
Readers: Were you surprised by any of SocialCode’s findings?