Facebook Ads Study: Reach Trumps Engagement Optimization
ADOTAS — SocialCode has just released a new report on Facebook Ads and how to make them drive branding and offline sales.
The report, “For Branding Campaign ROI, Engagement Optimization Isn’t the Best Bet,” explores the challenge that comes with so-called “engagement metrics,” which the authors content is 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,” say the authors. “However, engagement metrics still are important in order to identify effective creatives and content, which can then be applied to achieve audience reach objectives.”
Some key assertions and findings in the report:
- Thanks to the raging popularity of Facebook and Twitter, news feeds have become more competitive venues for consumers seeking attention, and especially brands seeking consumers’ attention.
- 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.
- SocialCode claims the best ways to do this is to optimize toward engagement to surface the best creatives, 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.
- For example, a Fortune 100 health and beauty company seeking to build awareness around a free sample wanted to lower cost per thousand (CPMs) while lowering cost per engagements (CPEs), which is difficult since the two are often conflicting objectives.
- Case one: When SocialCode switched from optimizing for engagement to reach, it decreased CPM by more than 13x while sacrificing little CPE efficiency.
- Case two: For another of the advertiser’s subsidiaries, SocialCod ealso surfaced the best creative through engagement and then switch to reach optimization to lower CPMs 44%. Interestingly, the creative SocialCode chose performed so well that even though engagement rate increased slightly against the broad audience, CPE still decreased CPE 44%. It’s rare to lower both CPM and CPE simultaneously.
“While this is a simple method that works, it is counterintuitive for many social advertisers that have focused solely on driving engagement metrics — which are an important means, but not an end,” said the authors. “This method also creates challenges because it mandates that social content creators synchronize with their counterparts in media buying.
“But advertisers have no choice but to evolve in this direction. Content and media now are inextricably linked when it comes to driving brand performance. The stakes? Facebook’s revenue alone in Q1 was $2.5 billion, and we’re seeing significantly more brand advertisers exceed $1 million per month, some far more than that. At this growing scale, it would be irresponsible to operate social content and paid media in silos.”
The full report can be downloaded here.
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