Facebook Ads: Do They Even Work? | Facebook vs. Google Display Network
Comparing the value of the world's biggest online display advertising networks: 1) Facebook: Advertising reach: A+; Revenues/growth - A-; Advertising performance: B+; Ad targeting options: C; Ad formats: D+; 2) Google display
network: Advertising reach: A+; Revenues/growth - A; Advertising performance: A; Ad targeting options: B; Ad formats: A.
Advertising reach: Which display advertising network is bigger?
- Facebook: 1) More impressions! The world's largest social network comprising over 845 million monthly active users; 2) 51% reach of all Internet users; 3) 1 trillion page views per month.
- Google AdWords: 1) Broader reach (A+). The world's largest online display advertising network, comprised of Google properties including: YouTube, Blogger, Gmail plus million other websites; 2) 90% reach of all Internet users; 3)
180 billion ad impressions served up each month.
Source: ComScore US, Oct. 2011.
Revenues/growth: Growth rates & advertiser adoption
- Facebook: 1) Facebook (Q1 2012) revenues - $1.06 billion: Facebook revenues (Q1 2012 vs. Q4 2011) - - 6.5%; Facebook profits (Q1 2012 vs. Q4 2011) - -32%; 2) Facebook's earnings and revenues fell in the first quarter of 2012.
Revenues in the first quarter were 6.5% lower than in the fourth quarter of 2011 and profit down 32% from the end of 2011.
- Google AdWords: 1) Google Display Network (Q1 2012) revenues - $2.9 billion: Google Display Network revenues (Q1 2012 vs. Q4 2011) - +1%; Google Display Network profits (Q1 2012 vs. Q4 2011) - +0.7%.
* Excludes $7b. in revenues from Google Search.
Advertising performance: Who offers the greatest measurable advertising ROI for advertisers?
- Average click through rate for banner ads in the United States - 0.1%.
- What Facebook isn't telling you about its risky ad business: Facebook does not publish its average CTR, but independent analysis from Webtrends on more than 11.000 Facebook campaigns showed that the average CTR for Facebook
ads in 2010 was 0.051. The rate, according to the Webtrends report, dropped from 0.063%, which points to a downward trend.
- According to TBG Digital, in Q1 2012 (Facebook): 1) Advertising rates rose 40%; 2) Click-through rates fell 8%; 3) The feeling that marketers are paying for the concept of the Facebook audience rather than reality is difficult to
- Average CPC (Facebook) - $0.80: CPC vary wildly based on advertiser ad targeting options and competition levels.
- Facebook average click-through rates decline by half about two days after they are released: 1) Day 1 - 0.04; 2) Day 2 - 0.03; 3) Day 3 - 0.02.
- CPC's vary largely based on selected ad placement options (Facebook) - $.075 CPCs.
- Google AdWords: The average CTR of an ad on the Google Display Network is 0.4% - almost 10 times as high as a Facebook ad.
- Depending on targeting options used, the CTR on Google Display Network can be up to 36 times higher.
- Google Advertisers drive around 20% of their conversions through the Google Display Network.
Ad targeting options: Who provides the most precise ad targeting options?
- Facebook: 1) Topic & interest targeting: Target users from predefined interest categories, inferred from user browsing history; 2) Keyword contextual targeting: Use keywords to find web pages for your ads across the Google
Display Network; 3) Remarketing: Target ads to people who've previously visited key pages on your website as they browse other web sites in the Google Display Network; 4) Education, workplace & likes: Target ads based on
user's memberships and interests from user profile.
- Google AdWords: 1) Location targeting: Target ads based on user's geographic location; 2) Demographic targeting: Target ads based on user's actual age or estimated age range.
- Targeting options that are not supported by Facebook: 1) No mobile advertising options!; 2) No retargeting options; 3) No partner sites; 4) No keyword-based contextual targeting options.
- Facebook hasn't figured out mobile yet: About 425 million people use Facebook every month on mobile devices - and they don't see ads. Facebook earns no significant revenue from its mobile apps on iPhone and Android.
Ad formats: Who supports the most engaging ad formats?
- Facebook: 1) The Facebook ad: Title, description + image; 2) Sponsored stories: Some marketers and analysts say Facebook caps its revenues by limiting ad sizes; Facebook ads - and the prices they command are small compared
with other sites because of an early decision by CEO Mark Zuckerberg to keep Facebook uncluttered.
- Google AdWords: 1) Text ads; 2) Image ads: Including Flash based ads; 3) Ads in videos; 4) Ads in mobile web or games!
- "Google Display Network is our winner for now: Open questions remain: Does Facebook even want to be a great advertising company? Facebook was not originally created to be a company. It was built to accomplish a social
mission - to make the world more open and connected... Simply put: We don't build services to make money, we make money to build better services" (From Mark Zuckerberg Letter to Shareholders - Official Company S1 filing).
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