Authors: Addie Conner – Chief Innovation Officer | Max Kalehoff – SVP, Marketing | Ben Weiss – Marketing Content Strategist
Reach is a better success indicator than engagement for branding campaigns
Facebook direct response campaigns have a clear success metric: cost per action (CPA). An exact measurement of how many ad dollars it costs for a user to click offsite and convert through a digital purchase or event registration.
Without immediate conversion or revenue data, success metrics for Facebook branding campaigns – designed for brand awareness, preference or offline sales – are less clear. Consequently, some marketers choose user engagement metrics to measure success, and optimize campaigns accordingly.
While engagement metrics may be alluring due to availability and immediacy, data show they’re not accurate predictors of brand preference, conversion events or latent revenue. As reported in Facebook’s white paper, Engagement on Facebook – When It Matters, ad engagements often are a result of a user’s “click tendencies” rather than a concrete expression of intent to act. In fact, research from Datalogix and comScore shows more than 90 percent of offline sales “come from people who don’t interact with ads during the campaign.”
Further, a 2011 Nielsen study found click-through rate, a metric with significant parallels to engagement rate, “showed no connection to sales lift.”
Then what is a valid way to measure success for Facebook branding campaigns? Facebook’s Engagement on Facebook – When It Matters advises that “KPIs and metrics that you know drive business results in other channels should also be used on Facebook.” Looking to television, sanctioned branding KPIs are reach (number of people messaged), frequency (number of times people are reached), recency (reaching someone with a message close to a conversion event). These not only are the foundation of Nielsen television metrics, but have formed the basis of Nielsen’s digital measurement products, such as Online Campaign Ratings (OCR), Cross-Platform Campaign Ratings (XCR) and Nielsen Brand Effect.
Proving the effectiveness of reach for digital campaigns, a 2012 study by Facebook and Datalogix found campaigns maximizing reach had, on average, 70 percent higher ROI for in-store purchases.
Though engagement metrics are less effective as branding KPIs, marketers still can use them to optimize ad creatives early in campaign cycles while lowering CPMs. Engagements can indicate which creatives generate the most positive interactions, both organically and when amplified with spend. Positive interactions – which include likes, shares and positive comments – yield additional unpaid impressions through social sharing. Positive interactions also drive higher quality scores, Facebook’s assessment of ad quality that factors into bid pricing. High quality scores facilitate lower CPM costs since the ad is being viewed favorably by Facebook’s algorithm. The combined effect of unpaid, added reach through sharing, and a high quality score drive even lower effective CPMs.
Consequently, campaigns that achieve high engagement without sacrificing reach achieve incremental value.
Warning: Engagement optimization erodes campaign performance
Optimizing toward an engagement KPI not only prevents the benefits of reach optimization, but also confines campaigns to a small audience that, as research shows, is no more likely to convert or buy.
Engagement optimization means ads are served to a smaller subset of a target audience who, based on historical data, are likely to click and engage with an ad. Therefore, the only option for deploying a full campaign budget is to serve ads to the engaged subset at higher frequency. Because engagements do not signal conversion intent, campaign impact plummets since the larger audience that could be served through reach optimization is forgotten.
To ensure engagement optimization doesn’t hinder overall campaign performance, let’s take a closer look at exactly how we recommend using it within a two-tiered bidding and optimization strategy.