• by Nancy Smith , September 26, 2013

As the gates of recovery inch open, the race to capture market share and trim costs continues to intensify -- and only the most agile businesses will pull ahead of the competition as they carefully allocate their spending. The rise of social media and mobile adoption have propelled marketers into a new era in which they are now challenged to balance forward thinking with practical decisions that maximize their monetary investments. The real trick, however, is that the systems in place to determine the true effectiveness of those “forward thinking” social and mobile investments are still a work in progress -- evolving right alongside the platforms themselves.

Despite some of its post-IPO challenges, Facebook has proven itself to be a social channel with staying power. In June, the company achieved a milestone by reaching over one million advertisers on its platform; proving naysayers wrong. While many doubted Facebook’s advertising-based revenue model, in its second-quarter earnings announcement, it was revealed that 41% of their revenue was actually generated by mobile advertising. To the business community and consumers alike, this was a clear demonstration of Facebook’s ability to stay ahead of the trend. And as such, brands and their marketers are realizing that their footprint on the platform is not one to ignore. 

Given the early but recent success and rise of native Facebook advertising, it has become extremely important for brands to recognize that they cannot simply expect a strong return on their investment -- they must pursue it. The truth is that placing an ad on Facebook is not enough. The key to successful advertising on Facebook is discovering a way to call your customer base to emerge from their role as a passive observer -- and urge them to participate and connect with you as a brand, just as they would with one of their acquaintances.

Based on research across dozens of companies over the past 12-18 months, we have found that brands that have successfully pursued engagement with their audiences on Facebook have received double the monetary ROI of brands that simply take the “set it and forget it” approach to advertising on Facebook. And as we see it, the purpose of engagement is to encourage dialogue, interaction and sharing -- ultimately magnifying your efforts and directly impacting even more sales growth.

So how does a brand drive engagement? There are many ways to encourage interaction through a Facebook page. Brands can do this by facilitating surveys or sweepstakes, offering coupons or promotions in stores or through their Web site, promoting downloads or by creating interesting content or other activities that encourage active sharing.

Not all types of engagement generate the same impact, since consumers will often react differently to brand activities; engaging at varied levels. That said, the most impactful types of engagement are the ones that are the most active and communal. This happens when customers take on the role of ambassador for your brand; disseminating your message and reaching their connections. As the most organic and sincere way of advocacy, people on Facebook will be more inclined to take interest in things they see their friends doing or recommending.

On the other hand, passive and personal engagement -- which is usually done through ad impressions or “likes” to which a post or page has received -- is still an excellent way to drive awareness and branding. Yet it does little to penetrate a broader audience outside of the direct viewer or “liker.”  

It’s also important to note that certain industries may experience more challenges associated with engagement when compared to others. For example, we have found that CPG companies have a harder time driving engagement than relatively indulgent brands and/or highly involved luxury products. The reason is simple: people generally put in more thought and research when making larger scale, passion-driven purchases.

While these principles may appear obvious to many, the reality is that few brands are actively pursuing an engagement strategy to coincide with their advertising efforts on Facebook. Facebook is not simply a box to check, but an important and cost-effective way to connect to your customers.