Facebook IPO: Can Facebook Beat the Google Display Network in Online Advertising?
- Read The Report: How Much Is Facebook Really Worth? Facebook vs. Google Display Advertising
- Read the Press Release: New Research Compares Facebook Advertising to Google Display Network: Who Comes Out on Top?
- Grade Your Google AdWords Account for Free: Use the Google AdWords Grader to get a free, instant AdWords PPC account audit.
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Facebook Advertising vs. Google Display Network Frequently Asked Questions
What is Online Display Advertising?
What is Facebook Advertising?
Facebook advertising enables advertisers to place text and image ads within Facebook's social media platform. Facebook ads are a type of online ads that let advertisers target their audiences by variables like age, location, birthday, hobbies, etc. Learn how to advertise on Facebook here!
What is The Google Display Network?
The Google Display Network 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.
How is the Google Display Network Different From Google Search Ads?
Google Display Ads are advertisements placed on Google web properties (YouTube, Gmail, etc.) and Google partner sites. Google search ads are text ads that appear in Google search results, alongside organic search results.
How do Google Display Ads Compare to Google Search Ads?
There are a number of unique advantages in using Google Display Ads. While Google search ads are great for reaching potential customers with a clear intent who are further along in the buying cycle, they are plain text, making it difficult to stand out. Google Display Ads allow for advertisers to create more appealing ads, increase brand awareness, and extend their reach to new potential customers they may not normally interact with.
Google notes that:
CTR is generally lower on the Display Network than on the Search Network because people behave differently on Display Network pages than they do on search sites. Users on Display Network pages are browsing through information, not searching with keywords.
Despite having lower CTR than Google Search ads, Google Display Ads' CTRs still outperform Facebook ads', and have solid conversion rates.
What Are the Benefits of the Google Display Network?
Google Display Network allows for remarketing, which drives conversions and increase brand awareness. Google Display Network ads also give advertisers a wide array of targeting and ad format options, in addition to helping advertisers reach new customers and extend their reach.
How is a Facebook Business Page Different From Facebook Advertising?
Creating a Facebook Business Page is a free feature Facebook offers, enabling businesses to interact and engage with customers on a more personal level. Facebook users can visit a businesses' Facebook page and "like" them, participate in contests, write on their wall, etc. Facebook advertising lets advertisers extend their influence to Facebook users who may not yet be fans or have previously interacted with the brand.
While business have noted that engaging in Facebook advertising often raises the number of likes a business's Facebook page receives, it rarely results in conversions.
Why Did GM Drop $10 Million Dollars Worth of Facebook Advertising?
General Motors recently announced they would pull their $10 million dollars worth of Facebook advertising because advertising on Facebook was not delivering the ad performance they hoped for. GM realized that people simply aren't looking to purchase cars when they are on Facebook.
How Do You Manage Your Facebook Advertising Budget?
Facebook advertisers have a few different ways to manage their Facebook advertising budget. Businesses advertising on Facebook can decide if they would rather pay on a cost-per-click (CPC) or cost-per-impression (CPM) basis. They can also set a daily budget with a maximum amount they are willing to pay each day, with the ad shutting off once your daily budget it reached.
How Do You Manage Your Google Advertising Budget?
Advertising on the Google Display Network, advertisers can pay on a CPC and CPM basis, but can also pay on a CPV (cost-per-view) and CPA (cost-per-acquisition) basis. Google advertisers can also set daily budgets that can be adjusted when necessary.
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What is the Google Display Network's Advertising Reach?
The Google Display Network extends a business's advertising reach to potential customers that might not normally seek them out with Google search. With Google Display, advertisers can place their Google ads on other websites that are relevant to what you are selling.
Google Display is the world's largest display advertising network, comprised of Google properties like YouTube, Blogger, Gmail, and 2 million other partner websites. Because of this, the Google Display Network reaches 90% of internet users, bringing in 180 billion ad impressions each month.
What is Facebook's Advertising Reach?
One of Facebook's big advertising disadvantages is that there isn't much room for extending advertising reach, since Facebook ads only exist in the Facebook platform. However, Facebook is the world's largest social network, comprising over 845 million monthly active users. This enables Facebook to reach 51% of the internet and generate 1 trillion pageviews a month.
How does Facebook's Q1 2012 Revenues Compared with Google's Q1 2012 Revenues?
Facebook's Q1 2012 Revenues totaled $1.06 billion, while Google's Q1 2012 Revenues for the Display Network (excluding their core Google Search business) totaled $2.9 billion. Facebook revenues dropped 6.5% and Facebook Profits dropped 32% from Q4 2011 to Q1 2012. Google Display Network Revenues increased by 1% and Google Display Network Earnings increased by 0.7% from Q4 2011 to Q1 2012.
Why Does the Google Display Network have close to 3X the revenues as Facebook in their Q1 reports, when Facebook users see more pages with Ads?
While Facebook advertisers have more page views, their CTRs are low and have a less of a reach across the internet as a whole since their ads only exist on Facebook. Ads on the Google Display Network have higher CTRs and a broader reach.
What is an Average Click Through Rate (CTR) for Banner Ads on the Internet?
In the USA, the typical CTR for a display ad is just 0.01% - that means that the ad gets clicked on 1 time for every 1000 impressions. This applies to the average banner ad on any site in the USA.
What is the average CTR for a Facebook ad?
While Facebook itself doesn't publish its average Click-Through-Rate, independent research from Webtrends reviewed more than 11,000 Facebook campaigns and determined that the average CTR for Facebook ads in 2010 was .051%.
What is the average CTR for a Google Display ad?
The average CTR on the Google Display Network is .4% --almost 10 times as high as a Facebook ad.
What is the average CTR for a Google Search?
The average CTR on the Google Search depends on your ad position but can be as high as 30%. An average CTR on Google Search ads is around 2-3%, almost 10x more than The Google Display Network, and almost 100x higher than a Facebook ad.
Why is Facebook's CTR so much lower than Google's?
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. Another possible explanation is intent – people may be less responsive to banner ads within a social network than when using other types of websites.
Where do Google Advertisers get the most conversions?
Most conversions come from advertising with PPC on Google Search, but an average of 20% of conversions obtained by Google advertisers come from the Google Display Network.
What is the Average Google Display Advertising Cost-Per-Click (CPC)?
The average Google Display CPC is $0.75. note that CPC's vary wildly based on targeting options and advertiser competition
What is the Average Google Display Advertising Cost-Per-Click (CPC)?
Facebook's average CPC is $0.80, although Facebook's CPCs can vary dramatically depending on targeting options and competition levels.
What are Facebook's Ad Targeting Options?
Facebook advertising prides itself on the unique targeting options possible because of Facebook's collection of personal data. Facebook's user data enables advertisers to target ads based on users' education, workplace, and likes, among others. Facebook also allows for demographic targeting and location targeting.
What are Google's Ad Targeting Options?
Like Facebook, Google's Ad Targeting options include demographic targeting and location targeting. In addition, the Google Display Network enables advertisers to implement remarketing, interest and topic targeting, and keyword contextual targeting.
Which Ad Targeting Options are Not Supported on Facebook?
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.
How is monthly active users defined on Facebook?
On Facebook, a monthly active user is defined as a user who has visited the website in the last 30 days.
What is Remarketing?
Google AdWords remarketing, conducted through the Google Display Network, allows advertisers to show ads to users who have already visited their site while browsing around the web. Remarketing, also known as ad retargeting, can extend brand awareness, bring in customers that might otherwise be lost, and can dramatically increase your ROI.
Google notes that Yankee Candle used remarketing on the Google Display Network to re-engage shoppers, increase conversion rates by 600% and cut cost-per-conversion in half. While this case study was provided by Google, it's been shown that many businesses find success with remarketing.
What is Keyword Contextual Targeting?
Keyword contextual targeting allows advertisers to use keywords to find relevant web pages for your ads across the Google Display Network.
What is Topic and Interest Ad Targeting?
Topic and interest targeting lets advertisers target their ads to users from pre-defined interest categories inferred from user browser history.
What is Demographic Targeting?
Demographic targeting enables advertisers to target ads based on a user's specific age or estimated age range.
What is Location Targeting?
Location targeting is used to target ads based on user's geographic location.
What Ad Formats Does Facebook Offer?
Facebook offers only two ad formations: the standard Facebook ad (text plus an image), and a relatively new format, sponsored stories.
What Ad Formats Does Google Offer?
Google offers a wide range of ad formats for advertisers on the Display Network. Google's display network ad format options include text ads, image ads, flash-based image ads, in-video ads, ads for mobile web and mobile games. The mobile ad formats are still a work in progress, as advertisers disagree on whether a tablet should be considered a desktop or mobile device, but Google has currently voiced their belief, through the launch of enhanced campaigns, that mobile shouldn't be defined by device, but by time and location. Time will tell whether Google's mobile ad strategy will work.
What Sizes of Google Display Image Ads Does The Google Display Network Support?
Google Display Image Ads come in a variety of sizes:
- 200 X 200 Square
- 250 X 250 Square
- 468 X 60 Banner
- 120 X 600 Skyscraper
- 300 X 250 Medium Rectangle
Who Offers Better Tracking and Reporting Tools for Advertising?
While Facebook has basic reporting tools to review impressions and clicks, Google Analytics is vastly superior and more in-depth.
Why Are Facebook Ads Smaller and More Minimalistic than Google Display Ads?
Facebook exists primarily as a social media platform, so the user experience is absolutely paramount. Mark Zuckerberg doesn't want the advertisement to impede on the user experience, so ads are kept minimal and unobtrusive.
While users go to Facebook to chat with friends and have fun, users go to Google web properties and partner sites for a wide variety of reasons, possible to conduct research for upcoming purchases. This makes it appropriate and reasonable to have ads play a larger and more prominent role across Google properties and partner sites.
Shouldn't Facebook's Unique Advertising Data Result in Better Targeting, and Better CTR As a Result?
Facebook's wealth of user data is immensely valuable, and while it does allow advertisers to target niche groups that might normally bring in better Click-Through-Rates (CTRs), targeting doesn't change the fact that Facebook is primarily used for social, fun activities. Very users go to Facebook for purchasing decisions, and so ads go largely ignored.
Can Facebook Advertising Compete with Google Advertising?
Facebook has an impressive global reach, giving it the potential to be as much of an advertising powerhouseh as Google. But the real question is, does Mr. Zuckerberg even want Facebook to be an advertising-based company? Zuckerberg has 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.
While filling your site with advertisements isn't the "cool" thing to do these days, Zuckerberg can't ignore that 85% of his revenue is driven from internet advertising. Advertising is his business model, implementing better advertising on Facebook will ultimately determine how much Facebook as a company is worth.
Facebook advertising does have the potential to compete with Google advertising, but it all depends on how Mr. Zuckerberg chooses to handle advertising on the biggest social media platform in the world.
Will Facebook Create Better Facebook Advertising Opportunities?
It's difficult to say—updating Facebook advertising is essential if Zuckerberg wants Facebook to create revenues that will impress and please sharehoulders.
What does Facebook have to do to beat Google?
In the great Facebook vs. Google competition, it is essential that Facebook offers a larger variety of ad formats to match the Google Display Network's many options.
Where can I learn more about Facebook Ads?
You can learn more about Facebook ads at Facebook's business ads guide.
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