Facebook’s valuation of $100 billion puts it at half the worth of Google. Now the question being asked is whether or not it can beat Google and their ever popular Adwords. Since both Google and Facebook generate most of their revenue through advertising (advertising accounts for 96% of Google’s revenue vs. 86% of Facebook’s).
A new study from published by internet marketing software company WordStream, offers a unique perspective into the matter by comparing the Facebook’s advertising vs. the Google Display Network.
WordStream compared Facebook and Google Display Network in these five advertising categories:
- Advertising Reach: Both companies have astounding reach. The GDN has more expansive reach (it has the ability to reach more unique people across the world), but Facebook has more pageviews (fewer people spend more time on Facebook, meaning it can hit the same people on the head more times with ads).
- Advertiser Adoption/ Growth Rates: Facebook’s advertising growth has been strong – but it hasn’t kept pace with growth in its user base.
- Ad Performance: Facebook ads have very low click-through rates (CTR) – at less than 0.05%, just half the industry average for banner ads. Why? It may be Facebook’s relatively slim offerings in terms of ad formats and targeting options, which are the key for driving ad relevancy and CTR. Google has industry-standard analytics tools, whereas Facebook is very thin in terms of reporting. Another possible explanation is intent – people may be less responsive to banner ads within a social network than when using other types of websites.
- Ad Targeting Options: Facebook doesn’t offer mobile advertising (a huge hole, especially with mobile use growing so fast), retargeting (or remarketing), advertising on partner sites, or keyword-based contextual targeting options for display ads. Google offers all of these.
- Ad Formats: Facebook has just two options: the standard Facebook ad (text plus an image) and a relatively new, sponsored stories. This is paltry compared to Google’s display network ad format options: text ads, image ads, flash-based image ads, in-video ads, as well as ads for mobile web and mobile games.
From an advertiser’s perspective, Facebook currently falls short in all five areas when compared to the Google Display Network.