Infographics

Google Display Network vs. Facebook Advertising [Infographic]

By Larry Kim May 15, 2012 Posted In: Infographics Comments: 27

Is Facebook really worth +$100 billion?

That was Facebook's market capitalization, based on where the stock is priced for its IPO on Friday, May 18.

I’m no investment analyst, but here at WordStream, we are experts on online advertising. Facebook’s valuation of $100 billion puts it at half the worth of Google. 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), we can definitely weigh in on the worth question from an advertising perspective.

So we decided to do a comparative analysis of the world’s largest online display advertising networks: Facebook vs. the Google Display Network.

Facebook Ads vs Google Display Network Breakdown:


To be perfectly clear, we’re not comparing Google vs. Facebook as companies per se. Google is a search engine, and Facebook is a social network. This is a specific comparison of the display advertising capabilities of Facebook against only the display advertising component of Google's business (the Google Display Network), which makes up roughly 20% of Google’s total advertising business. The Google Display Network allows advertisers to place contextual ads on a network of sites across the Internet (including Google properties like YouTube, Blogger and Gmail as well as over 2 million other participating sites), rather than in the search results.

So here’s what we found. Click the image to enlarge.

Google Display Advertising vs Facebook - google display network, google display network sites, google display network banner sizes, google display network ad specs
© 2012 WordStream, a Provider of AdWords and PPC Management Software.

Google Display Advertising vs. Facebook: What We Found

For now, we believe that the Google Display Network (GDN) provides advertisers with significantly more value than Facebook advertising in terms of the five key areas outlined below. As yet, Facebook’s advertising platform hasn’t kept pace with the explosive growth of its social network.

We compared Facebook and Google Display Network (GDN) in these five advertising categories:

  • Google Display Network Advertising Reach: Both companies have astounding reach. The Google Display Network (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).
  • Google Display Network Advertiser Adoption/ Growth Rates: Facebook's advertising growth has been strong – but it hasn’t kept pace with growth in its user base.
  • Google Display Network 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. Click through Rates on Google Display Network were nearly 10x higher than Facebook Advertising.
  • Google Display Network 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 Display Network offers all of these.
  • Google Display Network Supported 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.

To put it another way, Facebook (currently valued at half as much of Google's entire business) offers advertisers less advertising value than what’s offered in the Google Display Network, which makes up just a quarter of Google’s total business, makes 3x more revenue than Facebook and is growing faster, too.

Will Facebook Live Up to its Promise?

Now, to be sure, Rome wasn’t built in a day, and neither was the Google Display Network – it was originally called the Google Content Network and was for a long time considered painfully inferior to the Search Network by most AdWords advertisers. But the GDN has come a long way.

Given its impressive global reach, Facebook has the potential to be as much of an advertising behemoth as Google. But the question remains – does Mr. Zuckerberg even want Facebook to be an advertising-based company? In his 2,500+ word letter to shareholders, he only mentioned advertising once. He’s been quoted as saying:

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.

I think Mr. Zuckerberg is in denial here – he wants to be this cool company that’s all about "connecting people," but 85% of his revenue is driven from internet advertising. Advertising is his business model. The sooner he figures this out, the higher the chances that Facebook is actually worth +$100 billion.

For Facebook to prove its worth to shareholders, they need to change this nearly hostile attitude toward advertising. Mark Zuckerberg has said that he doesn’t want advertising to "ruin Facebook" – but it really doesn’t have to. They need to embrace advertising’s potential to build value for both advertisers and end users. This means helping businesses connect to the most relevant audience possible, deliver their message in more engaging ways, and manage and report on their advertisements more easily and completely.

Only then will Facebook be as much as it's believed to be worth – we’re easily looking at 5+ years of work here, based on how long it took Google to get where they are today.

Will Facebook be able to deliver?


Google Display Network Q&A

What is the Google Display Network?

The Google Display Network (GDN) is the world’s largest display advertising network for placing banner ads on Google web properties (such as YouTube, Blogger, Gmail, etc.) as well as a network of over 2 million other web sites (eg: USA Today, NY Times, etc.). The Google Display Network was formerly known as the Google Content Network.

I hate reading - Is there a Google Display Network video that explains how it works?

Yes, Google has an informative video to help explain how the Google Display Network works.

How does the Google Display Network size up against other display advertising options?

While there are other display advertising options, few others have the reach that the Google Display Network offers, reaching over 83% of unique Internet users around the world.

What are Google Display Network partners?

On the Google Display Network, your Google ads can appear across a collection of partner websites and specific Google websites, such as Google Finance, Gmail, Blogger, and YouTube . Google partner sites are sites that allow Googe Display Advertising on their site, enabling you to reach audiences through their favorite sites and blogs.

Is Google Display Network targeting more effective than traditional media?

Different advertising methods work differently depending on your business and ideal audience. Many advertisers find Google Display Network effective because it allows you to connect with customers across a million websites.

 The Display Network can help you connect with customers on over one million websites around the world. It lets you show your ads to people visiting their favorite news sites or blogs, which is a unique benefit. The Google Display Network also allows a variety of targeting options to help ensure you reach relevant audiences.

How does Google Display Network retargeting work?

Google Display Network retargeting allows advertisers to communicate with people who’ve previously visited key pages on your website as they browse the other websites in the Google Display Network.

Ad retargeting, also known as remarketing, can extend brand awareness, increase ROI, and bring in customers that might have been lost otherwise.

What types of websites show ads from the Google Display Network?

There are a wide variety of sites that your ads can appear on when you advertise on Google Display Network, ranging from news sites to hobby blogs.

What Google Display Network banner sizes are the most effective?

While the best way to determine which banner sizes and placements are most effective is through testing, many advertisers have noted that traditional right-side 300x250 banners often perform well.

Where can I find a Google Display Network site list?

The Google Display Network site has a list of the partner sites that can display your ads with the GDN.

Where do I find more information on Google Display Network pricing?

You can find more information about Google Display Network pricing on Google’s advertising page.

Where can I learn more Google Display Network best practices?

The Google Display Network site is a great resource for learning how to optimize your display ads.

What is Google Display Network Reserve and when do you use it?

Google Display Network Reserve lets advertisers guarantee impressions across brand-safe sites on the GDN. Just set your targeting options, impressions, and timing goals, and Google takes care of the rest.

Google Display Network Reserve is great when you want to achieve brand awareness in a set time period. Most advertisers use Google Display Network Reserve to launch new products, promote a limited time offer, or get word out about a specific event.

What is the difference between the Google Display Network and the Google Content Network?

Google Display Network refers to Google display ads on YouTube, Google Finance, Gmail, Google Maps, Blogger and Google’s display ad partners. Previously, advertisers would display ads on partner sites through the Google Content Network.

Is there a reporting tool for Google Display Network campaigns?

The Google Display Network offers several reporting tools to help you get the most out of your campaigns. These tools include Placement Performance Reports, Demographic Reports, Reach and Frequency Reports, Campaign Insights, and View-Through Conversion Reports.

What happens when I have an Ad that doesn’t meet Google Display Network ad specs?

In order to have your advertisement shown on the Google Display Network, you must meet Google’s ad requirements and specifications. If you do not meet the requirements, your ad will not be displayed. Read Google’s requirements for display ads in order to pass.

How does the Google Display Network determine what ads to show me?

Google pays attention to which websites and partner sites you visit on the Google Display Network, and uses an advertising cookie to link your browser with your interest and demographic categories. Google then uses this information to show you ads based on your interests and which sites you visit. You can change and edit the categories your browser is associated with through Google’s Ad Preference Manager.

Is the data on the ads I click in the Google Display Network connected to my Google search history, Gmail, or any Google Account information?

No. Your ad data is not linked to your Google Search, Gmail, or other Google Account information.

What data does the Google Display Network collect about me and how is that data used?

Google associates you with interest and demographic categories based on the types of websites you visit in the Google Display Network. Google scans the pages you visit to understand the content and interests associated with that site. For example, if you visit a softball-related site in the Google Display Network, Google will add a softball preference to your cookie. Then, as you visit other websites that are part of the Google Display Network, Google may continue to show you ads related to softball, such as softball game tickets or softball equipment.

Can I opt out from Google Display Network’s tracking? If so, how?

Yes, you can opt out of Google Display Network’s tracking by clicking the "Opt out" button in Ads Preferences Manager.

Does the Google Display Network show mobile ads?

Yes, advertisers can use the Google Display Network to have ads appear on mobile sites and on apps that show ads.

How can I start advertising on the Google Display Network?

It’s easy! Google can walk you step by step through the process of getting started with the Google Display Network.

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Comments

Tuesday May 15, 2012

Nick Stamoulis (not verified) Said:

Facebook  users typically sign in to find out what is going on with their family and friends.  When they use Google, they are looking for something specific and it may be a product or service which is why Google ads are typically more successful. 

Friday May 18, 2012

Larry Kim Said:

we were actually comparing google display network ads vs. facebook ads. so basically the ads you see on google sites like youtube, gmail, blogger, or when browsing other non-google sites like the NY Times or BBC or +2 million other sites. we did not include any stats from google search. Our conclusion is that display ads on google network websites are 10x more likely to be clicked on than display ads on facebook.

Tuesday May 15, 2012

Aaron Patton (not verified) Said:

Wow..Thank you for your posting..It gives more informations about it..:)

Wednesday May 16, 2012

Steve Ricketts (not verified) Said:

When it comes to advertising, it is Google that still tops. With Google Adwords and Google Adsense. Facebook is still a long way to go before catching up with Google.

Wednesday May 16, 2012

Ted Ives (not verified) Said:

Great infographic.

You forgot one of the most important ones:

Number of Ph.D's developing algorithms...

Facebook: C-
Google: A+

This is why the average CTR is so high on Google vs. Facebook!

Wednesday May 16, 2012

Ads software (not verified) Said:

Organized content is the best way to display or post an article, thank you for making it easy to digest your post.

Friday May 18, 2012

Larry Kim Said:

glad you liked it, ads software! :P

Thursday May 17, 2012

Sheldon Payne (not verified) Said:

As a digital media planner we are often asked how each of these two channels compare against each other. This provides an easy explantion of how they differ and what advertisers can expect when they invest in each channel. While it's not fair to compare both each channel against each other it at least provide ammunition for those who need to provide rationale for the recommendations.

Thursday May 17, 2012

Larry Kim Said:

Sheldon, keep in mind that we're only comparing the Display advertising portion of Google vs. Facebook advertising (we're excluding Google Search entirely, which is a completely different thing).

Thursday May 17, 2012

Tai-pan (not verified) Said:

Unfortunately for Facebook, they just assumed they could adopt the Television model; lots of eyeballs and little to no targeting.

However, they seem to have missed the fact that digital marketers have moved on from their simplistic targeting tools. If they start allowing keyword targeting, we might be interested again, but as of now we (and our ad $) are staying far away. No good money after bad as they say.

Sunday May 20, 2012

Jamie Hansen (not verified) Said:

It's tricky to effectively measure the real value of the "soft selling" Facebook advertisers have to employ.  Depending on your industry, you may or may not need to build any kind of brand recognition, or social integration for that matter.

Sunday May 20, 2012

Larry Kim Said:

true, but FB doesn't even provide the tools for busineses to help them figure out the real value of that soft selling. As an analogy, google is all about the hard ROI (sales, leads, etc) and they have all of Google Analytics to help you figure out the ROI of your paid search campaigns. What does FB offer to help advertisers track, understand and analyze the value of their advertising investment? not very much.

Sunday May 20, 2012

Mr Risky Startup (not verified) Said:

Just this week, I added my new business to Facebook. Getting the business page going was a breeze, but then I made crucial mistake - I decided to advertise with them too.

 
Wow, what a mess! I have done $10K or more in annual advertising with Google and Yahoo, but Facebook advertising process is terrible. I went through the process of setting up the ad, but when I added my credit card as a payment option, it all went crazy. Apparently, FB (who, by the way successfully charged my card for $1 as a test), decided that my account activity is "unusual". First, how can my activity be "unusual" when all I did was to add my credit card number and open the account that very day. What is unusual about that? 
 
Now, my account is disabled, only way to reach FB is via idiotic self-serve help section which (after a lot of work) gets you to their form where you can submit your question.
 
I did that, but now I am in catch 22 - they tell me that ad is rejected because my account is disabled, but they don't tell me how to enable it again. Then, I use the same process again, and answer is the same - your ad is rejected because your account is disabled... They use no-reply email addresses to email me, so I cannot have 2 way conversation with Facebook.
 
They may be worth $100B, but if they treat their advertisers the same way as they do general public, will their revenues keep coming in?

Monday May 21, 2012

Ivana Petrović (not verified) Said:

Hi Larry, good comparison, if Facebook doesn't include additional features in its platform this still won't be good advertising platform for e-commerce. I was working on European market with more loss than gain, which I cannot say about GDN 

Tuesday May 29, 2012

bytes (not verified) Said:

This was an excellent analysis of fthe 2 businesses but you forgot one thing. Google supplies an extremenly useful service, it brings huge ammounts of information on virtually any subject to a user instantly. Facebook offers no real service. Connecting people is hardly anything new nor is it particularly COOL. It's mainly a giant time suck.   

Saturday June 02, 2012

Justin Forrest (not verified) Said:

Great article and awesome infographic! 

BTW  the dudes over at drivingtraffic.com are using this infographic and not giving any cred back to you or your site... which I think is bs and is deserved (because it is a killer infographic!).

http://drivingtraffic.com/google-ads-vs-facebook-ads-whats-working-infog...

 

Monday July 02, 2012

lokesh (not verified) Said:

Yes I do agree with your points that Google is always a better option and moreover the are not evil.

I must say you have done quite a huge QA on this tipoic and you have compiled them here for us.

Thanks for sharing, it is really a helpful and interesting article.

Sunday July 15, 2012

Peter (not verified) Said:

Great article Larry!  I love infographics as well for simple breakdown

visually of what is being taught.

Thanks,

Peter

Thursday September 06, 2012

Glen Andrade (not verified) Said:

This makes complete sense as Great job on the infographics!  Facebook is clearly a social network and generally speaking users are not there to buy products and services.  However, we must not over look the incredible power that Facebook brings with its viral potential.  People "likes" act as essential social proof that can act as a buying trigger for many buyers.

Monday September 17, 2012

Anonymous (not verified) Said:

Although well written and informational, it seems like an infomercial that's slanted towards Google.

Thursday September 20, 2012

jared (not verified) Said:

Really great breakdown of both ad networks.

Thursday October 04, 2012

Peter Mutiso (not verified) Said:

Great breakdown. At this monent, Google Ads outdo Facebook ads in the market

Thursday October 04, 2012

Rich White (not verified) Said:

Larry:

Do you ever recommend advertising ONLY on the Partner sites versus a spread of Google Network and Partner? I am currently cross-testing both methods and have found my CTR to be significantly higher with the Partner ads and more cost-effective, however my overall conversion to my end goal is lower.

Thanks!

Wednesday October 31, 2012

rober (not verified) Said:

Thanks for sharing - yes there are flaws but good starting point and more then Google does.

To me the CTRs on display seem very high. .18% CTR? is this on text ads or image ads? Seems very high. The problem with google CTRs are if these campaign include the 600+ flash gaming sites google has in their network CTRs are higher. However when you remove the crap and lets say the brand navigational clicks I think it settles to more around .05% for most campaigns I have seen. 

.18% sounds more like a Retagreting number?

Anyone else think this or do I have bad CTRs ;)

Monday November 19, 2012

iWeb Expert (not verified) Said:

Thanks for this fantastic post. Really giving credits for your efforts to provide us with this valuable information.

Saturday February 23, 2013

Seo Solution (not verified) Said:

I totally agree with Nick Stamoulis. Facebook is not a social media for profesionals. If you are a big company it is more dificult to find clients in Facebook than in Google. I like to say that Facebook is like our diary newletter or mobile phone if we need to comunicate with someone. That is way is the best for clubs, party organiser and events that are similar to those.

Thanks for the good post,

Alex 

Wednesday July 17, 2013

Coral L. (not verified) Said:

I'm curious to see what the comparison is now that Facebook has made tons of changes (ie: sizes, remarketing, etc). 

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