Engagement vs Reach, Which Gives the Best Return on Investment?

Ads are how the social media giants make their money and rightly so since social media is all about interactivity and engagement with content. Engagement is measured by cost per action (CPA) which is an exact measurement of how many ad dollars it costs for a user to go to a different website and purchase something or register for an event. In other words, how much does it cost to make a sale. While this is certainly an important metric to track, it has been proven by a 2011 Nielsen study that engagement “showed no connection to sales lift.”

If engagement doesn’t boost sales, how does a company or marketer keep track of the effectiveness of their efforts? After all, we know marketing does work because it does boost sales. But if it’s not the engagement that boosts sales, what does? The short answer: simply reaching people boosts sales. Rather than pushing for engagement from the entire audience, which can inadvertently alienate certain people because they do not share the same experience or knowledge, putting out a message that is easy to understand and explain will reach more people with better end results.

So what’s the takeaway? Engagement and reach are both important but it is common to get caught up the engagement numbers and focusing exclusively on those numbers and disregarding the rest. Both play a role in lowering the CPM (cost per 1,000 impressions) but, especially in the early stage of life for a company, reach is just as important as engagement. In fact, focusing exclusively on engagement can actually limit the scale of the audience. Check the graph and you will see how reach encompasses engagement but engagement does not encompass reach.

Don’t get us wrong, engagement still matters but for efficiency, marketers are better off optimizing their paid buys towards creative reach and looking to interactive metrics as an indicator of higher quality creative. Those interactive metrics are called KPIs (Key Performance Indicators) and they can be from something like email subscriptions or Facebook likes or something more subtle time spent on site or time spent on key pages. Measuring these performance indicators are good for staying up to date on the success of your marketing efforts.

So remember the importance of reach and don’t forget about tracking engagement through all of the different KPIs and continue improving those incredible marketing skills of yours!