Facebook engagement won't necessarily rev a brand's sales, but it does serve one purpose, according to a new report: It acts as market research for social media advertising.
SocialCode, a marketing technology firm, argues that consumer engagement with a brand's Facebook posts have a weak correlation with sales. If you create a campaign trying to evoke as much interaction as possible, you'll wind up targeting a relatively small group, but at a fairly high frequency.
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A more successful campaign would focus on reach and frequency, the two variables that are used to measure the success of TV campaigns.
Yet that doesn't mean engagement is useless.
The company's research recommends using engagement as a way to test which ads work the best. Max Kalehoff, SVP of marketing at SocialCode, says the threshold rate of engagement is around 2% to 5%, though it varies by industry. At that point, the company recommends putting money behind a post and turning it into a promoted post. A continuing engagement rate of 1% to 4% is enough to justify further spending, he says.
"It sounds like common sense," Kalehoff adds. "But when advertisers get into trouble is when they spend all their money trying to optimize engagement."
The differences between optimizing a Facebook campaign for reach versus engagement:
SocialCode isn't the only company to point out that engagement has almost no impact on sales. Facebook itself released a white paper recently, stating that engagement is a red herring for marketers. Facebook partner Datalogix also found that 99% of offline sales were generated by people who had seen ads on Facebook but didn't interact with them.