Facebook Vs Google: No Contest

Oct 19th

So the conversation in tech media of late is that Facebook is set to become a bigger cash cow than Google.

Why?

People spend more time on Facebook. Facebook has users locked-in (kinda). Facebook "owns" the social map. Facebook is popular. Facebook is everywhere. Facebook is big.

Uh-huh.

Facebook may be all those things, but when it comes to translating "viewers" into revenue, Google currently wins hands down.

Google wins because Google's advertising is closely aligned with the users primary activity, which is to seek topics and click links. The primary activity of a user on Facebook is to socialize. Translating this activity to a commercial imperative, in a way advertisers find profitable, is the challenge Facebook faces.

The primary user activity on Facebook isn't yet as conducive to effective advertising as the topic-matching system used by Google. This shows up in the revenue data.

Google's revenue, with supposedly fewer users than Facebook, is $23.531 billion - and rising. Facebook, with more users, who reportedly spend more time on the site, has estimated revenues around $1b. Admittedly a bit of an apples-and-oranges comparison, but useful to get the two entities in perspective. Facebook is nowhere near Google in terms of advertiser revenue.

In short, being popular doesn't necessarily translate into revenue, or marketing value. Ask any popular blogger who is blogging on a non-commercial topic. It can be difficult to convert some audiences, and some activities, into revenue and advertiser value.

As a commenter, Chris Norstrom, on the TechCrunch page I linked to above pointed out:

500 Millions users does not mean those users want to accomplish EVERYTHING on your site. Facebook already tried their own version of "yahoo.Answers" and it failed. People come to facebook to lol with friends and waste time, nothing more. Not to check inboxes, not to ask questions, not to participate in groups, not to rate stores or check into places, not to send or receive money, not to edit documents.

Is he right, do you think?

Like Button Replacing The Link

Some commentators have suggested that the "like" button on Facebook will replace the link

Enter the Like button, the social solution to search, and the replacement of the link as a voting mechanism. The people as a whole are more effective at determining what content is relevant and most of those people are unfortunately not effective at creating links

A "thumbs up" system doesn't say much. It may help people find out what is most popular amongst the heard on any given day, but as anyone can see from Digg, exploding pancakes doesn't mean much, popular as the topic may be. I suspect Facebook users will use the Like button even less when they come to realise it's a form of permission marketing.

Google, on the other hand, is oriented around topical queries. Relevance is decided by alorithms that measure over a hundred different factors. It's fair to say that if a simple "Like" button worked as a means to determine relevance, Google would have implemented it years ago. They pretty much have one, but who really uses it?

In short, user voting is fraught with problems. It won't replace sophisticated algorithms. The link, the basis of the web, isn't going away.

Fit The Message To The Medium

Which, in a rather long-winded way, brings me around to my point.

The Google vs Facebook contest doesn't really matter as far as marketing is concerned. Both environments are valuable to marketers. Both need to be approached in different ways.

As we discussed in Google Keyword Research Tool: Not Popular, search is suited to concepts and services of which the searcher is already aware. Facebook is better suited to distraction media, viral campaigns, and marketing targeted at specific demographic groups.

Facebook may be useful at introducing people to new concepts - especially if those concepts fit into an existing social activity, as defined by members of a specific demographic i.e. the group "Porsche Owners Club" may be interested in new Porsche merchandise, whether they're actively seeking it or not.

Keep in mind the core function of Facebook. The Facebook user isn't likely to be actively hunting for something. They are killing time, or socializing. As a result, Facebook is less suited to direct sales, as it is difficult to determine which phase the buyer is at in the sales funnel. Facebook is more suited to brand building and awareness campaigns. It is suited to relationship building. Adjust your marketing approach accordingly.

For further reading on the specifics of Facebook marketing, SEOMoz offers a great overview of marketing approaches on Facebook.

Published: October 19, 2010

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Comments

October 21, 2010 - 7:37pm

Hello,

First of all - by no means do I consider myself an expert in advertising of such proportions - but if the data presented at http://techcrunch.com/2010/10/02/facebook-bigger-google/ is true, then Facebook does make sense.

It would be interesting to hear what you think about this.

Here are the important numbers:

"[brand advertising] accounts for 90 percent of the $600 billion ad market" (not sure US only or global (most likely), but still impressive)

"Television advertising represented $60 billion [in the U.S.]"

TV and Facebook as activities have similarities - both are mostly a form of entertainment. So if TV ads work, then why wouldn't Facebook ads work?

And from a branding point of view Facebook's global reach and demographic targeting may be more appealing to advertisers, who otherwise have to research keywords, which on their scale is pretty inefficient to do.

October 22, 2010 - 4:34am

The thing left unsaid in comparing Facebook as superior to Google in brand advertising is this: Google already sells TV ads, just launched Google TV, and owns Youtube...which is getting billions of video views every single day.

October 22, 2010 - 7:07pm

OK first off - not being a troll, definitely not trying to get annoying.

With that disclaimer, hopefully I could get your objective opinion on this...

Facebook vs. Youtube - FB has better targeting, YT - has the potential to receive better attention for the ads. As far as scale goes they're pretty close.

Facebook vs. the rest of Google - first of all what's going to happen to TV in the next 10 years (not that I imply FB will be around for that long, but hypothetically speaking), second Google is still a reseller with TV ads, third FB might very well receive as much user time as TV does and with their targeting, and fourth - FB is just one place where you could do all your advertising whereas with TV channels you have to target more than one to get the exposure FB can bring.

Either way I don't believe Facebook will become bigger than Google, but it sure can get "big enough".

October 24, 2010 - 10:04am

I am not 100% certain that Facebook has (and will maintain) way better targeting.

The general nature of Facebook interaction is typically not one of high targeting...eg: sharing photos & chatting with friends is not the same thing as watching the U2 live Vertigo Chicago show & seeing that U2 is now on tour with tickets available. Further, consider that Google will move into the sales of many types of media: movies, music, ebooks, etc. ... there is an endless opportunity for integration that is *hyper* targeted.

October 19, 2010 - 3:28pm

I'm an admittedly very savvy user attuned to such things, but I won't bank on Facebook just because they're so much more wiling to violate privacy. Google does these things in test products or dabbles; Facebook has 1 core product - your profile - and goes all in. At some point, it seems the tide will turn against that.

When it comes to voting by Like instead of voting by Link:

I really like Gowalla. I forget to use Gowalla. When I forget to use it, it becomes useless. If I'm not checking in consistently when I'm out and about, or in a new place, then I haven't captured my activity consistently and it's an inaccurate representation. That's a let-down.

It seems the same would be true for Like buttons vs. Links. I *consistently* click links when I'm looking for information. That's the goal. If clicking "Like" is an optional action, it's going to be inconsistent. I'll be busy and will forget. And the more I forget, and the more inconsistent it is, the more I'll stop caring.

Anything worthwhile has to be integrated into the necessary action; not an ancillary action, and that, to me, is where Google wins.

(The solution to my Gowalla issue would seemingly be to make check-ins automatic. But that would raise a privacy flag for me, bringing me back to my initial issue with Facebook.)

October 20, 2010 - 11:42am

It seems to me the key issue here is give and take.

I don't mind taking advantage of the links offered to me when I'm looking for something.

I hate giving my opinion or preference when I'm in my cocoon browsing - I ignore, I lie or next week I change my mind.

You could argue that the statistics behind both "link" and "like" will ensure reliable predictability (e.g. individual electrons are totally unpredictable, but a billion of them have a predictable outcome) - but me clicking a link is inherently much more reliable than me giving an opinion.

But I'm bias - like clearbold, I don't trust Facebook and, like him, I think that will eventually prove to be their undoing - well, once the users start acting predictably on mass...

October 20, 2010 - 1:42pm

Great points Aaron. Comparing the two is pointless, since they're not in the same bussiness...not really.

They both provide incredible value - but in very, very different ways. And whenever they try to push the boundaries into the other medium...that's when they tend to misstep.

Live and let live.

October 20, 2010 - 8:59pm

A concept that's motivated my work for the last few years is "behavior shaping"; the idea is that you want to attract a certain kind of person who's going to do a certain sort of thing.

For instance, if you're selling product X, you want to attract people who are going to buy product X. If you want to get organic links, you want to attract people who are going to make organic links. My link building reached a whole new level of effectiveness when I realized that I could create links that would not just raise my rank, but would actually bring in people that would bring me more links.

From a behavior shaping perspective, Google is very good for finding people who are "looking for something".

I used to think Facebook traffic was just crap, but then I saw some data that indicates that Facebook users have high conversion ratios to "spending time on activities online".

Farmville proves my point.

Personally, there are times when I need slave labor to make my content for me. I like using Mechanical Turks because I can fire them if I don't like their work (it's less expensive then you think, when you consider the high cost of writing social software and the high cost of dealing with 'griefers') On the other hand, there are some tasks that I think I can use some 'free' labor for, so I'm using a Facebook-centric strategy to attract them. Another nice thing about Facebookers is that they're less like to be griefers, because they take their identity seriously. I don't have to get up in the morning and ban the assholes who wasted two hours pasting thousands of anti-gay slurs.

In the long term I'm trying to get revenue from a population of people who come in from search, but it's nice to be able to choose who your users are at the beginning.

October 21, 2010 - 12:53am

Great stuff there CureDream! :D

Lots to chew on in that comment. :)

October 21, 2010 - 10:19pm

Interesting... I have publishes a post in my german blog last week about this discussions, too.
http://www.online-marketing-deutschland.de/online-marketing/facebook-vs-...

I share your opinion, but Facebook and other companies, that got problems with the success of google often put thes theme to the media. Its all about envy! But I guess noone can reach googles innovation in PPC Advertising.

Greetings from Germany

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