Marketers now have the opportunity to use precision to target audiences as well as mass scale to reach larger ones with digital and mobile platforms, like Facebook and Instagram. But if they limit reach, are marketers losing out on the opportunity to drive impact at scale?
To better understand the importance of reach in a digital world, Facebook Marketing Science conducted research to determine how efficient reach is in driving impact to more people and real business results at scale for brand advertisers.
Relating reach to impact
To illustrate a brand advertiser’s dilemma between achieving precision and scale, consider the following campaign scenarios:
- Narrowing in on a small and potentially more precise audience. This approach may result in a higher level of lift on people’s behaviors because the product may be more relevant. The scale of the campaign, however, limits the size of the audience impacted.
- Scaling reach to a broader audience doing this may yield a lower response rate to the advertising, but the total number of people impacted could be much greater. When measuring this campaign against total impact, reaching a broader audience is more successful.
In the digital space, advertisers often have the ability to define their target audience using a variety of different signals, such as demographics, interests, or behaviors. While very precise targeting may lead to a higher response within a target audience, it’s important to understand the trade-offs. Is optimizing towards reach the most important lever brand advertisers can pull?
Facebook conducted a study and found that optimizing towards action-based metrics results in reaching a larger percentage of more expensive users. Action-optimized bidding resulted in an 80% higher average user CPM versus reach-optimized bidding.
Consider a simulated eight-week campaign. Based on Facebook’s findings, an average CPM for action-optimized bidding is higher than reach-optimized bidding, but the lift in awareness is similar across both. From this simulation, the brand advertiser would get a larger reach (5.2 million people) with reach-optimized bidding than with action-optimized bidding (2.9 million people). And given that both optimization scenarios have the same campaign budget, the same frequency and the same expected lift in brand awareness, reach-optimized bidding would drive more scale and therefore be more cost-effective in terms of generating brand awareness.
By optimizing towards reach rather than towards action-based objectives, advertisers can generate a much larger impact for their brand, more cost-efficiently.
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