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Engagement Rate

The level of engagement generated from a created content or a brand campaign

What is the Engagement Rate?

The engagement rate is a metric used to gauge the level of engagement generated from created content or a brand campaign. In other words, the engagement rate refers to the level of interaction with followers that is generated from content created by a user.

 

Engagement Rate

 

 

Quick Summary:

  • The engagement rate is used to measure the level of interaction by followers from content created by a user.
  • It is calculated as total engagement divided by total followers, multiplied by 100.
  • The engagement rate provides a more accurate representation of content performance than simply looking at absolute measures such as likes, shares, and comments

 

Formula for Engagement Rate

 

Engagement Rate - Formula

 

Where:

  • Total Engagement refers to the number of interactions (the measurement of which is dependent on the platform); and
  • Total Followers refers to the total amount of individuals that are following the account/page/etc.

 

Total engagement is calculated differently depending on the platform. For example:

  • Total engagement on Facebook would be comprised of the total amount of shares, likes, reactions, and comments
  • Total engagement on Instagram would be comprised of the total amount of likes and comments

 

It is important to note that the makeup of “total engagement” can be altered in any way by the user who is using the metric. For example, the user may want the total engagement on Facebook to include only the total amount of likes. Such alterations are valid if the user uses the same method of determining total engagement across all their calculations. For example, consider the following Facebook pages that each created a brand campaign post:

 

Sample Facebook Data

 

If an individual deemed that “total engagement” should be comprised only of total likes and comments, the individual should use that same measurement standard across the other Facebook pages to ensure consistency.

 

Example of Engagement Rate

An analyst is conducting analysis on Company ABC, which has a social media page on Facebook. Part of the analysis process involves determining how engaged followers are with the company’s Facebook page. The analyst also found two comparable companies. Given the information below, does Company ABC see a higher rate of engagement than the comparables?

 

Engagement Rate - Example

 

Using total likes, total shares, and total comments as the method for determining total engagement, the rate of engagement for each company is as follows:

 

Company ABC = (54,321 + 1,523 + 105,231) / 5,123,501 x 100 = 3.14%

Comparable 1 = (74,321 + 2,191 + 116,954) / 10,421,412 x 100 = 1.86%

Comparable 2 = (65,121 + 945 + 94,512) / 6,321,512 x 100 = 2.54%

 

From the resulting figures above, Company ABC saw a higher engagement rate than the comparables. Note that Company ABC recorded the lowest number of followers but enjoyed the highest engagement rate. It only garnered about 105,000 comments to Comparable 1’s 116,000, but that number came from just about half as many followers as Comparable 1’s page has. The numbers imply that the content on the company’s Facebook page is more appealing to followers than that of similar pages.

 

Main Advantage of the Engagement Rate

The engagement rate provides a more accurate representation of content performance than simply looking at individual absolute measures such as the number of likes, comments, shares, etc. It is a more comprehensive metric. As shown in the example above, although Comparable 1 attracted the highest number of followers, their engagement rate was the lowest. This potentially indicates that the content on Comparable 1 is not of high quality. As such, it is a useful metric to use to (1) gauge the level of audience interaction, and (2) to gain insight into the quality of the content.

 

Main Disadvantage of the Engagement Rate

The engagement rate is unable to differentiate between interactions that are more important than others. For example, an individual may consider a “share” on a Facebook page more important than a “like.” However, the engagement metric does not account for that – both interactions are “equal” in the calculation. The metric must be customized to provide deeper insight.

 

More Resources

CFI offers the Financial Modeling & Valuation Analyst (FMVA)™ certification program for those looking to take their careers to the next level. To keep learning and developing your knowledge base, please explore the additional relevant CFI resources below:

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  • Click and Mortar
  • Customer Bonding
  • Return on Ad Spend (ROAS)