Facebook vs. Google: The War of Ads [INFOGRAPHIC]VW Staff
After just two trading days since the Facebook Inc (NASDAQ:FB) IPO , many are wondering what is the value of The Social Network’s common stock. 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.
The Google Display Network is just the banner advertising component of Google Inc (NASDAQ:GOOG)’s business, consisting of ads served on Google’s own websites like Blogger, Gmail, and Youtube, as well as a network of about 2 million other websites – It’s about 25% of Google’s total revenues (the rest of Google’s revenues come from their search engine business, which was excluded from their study).
Since 86% of The Social Network’s revenues last year were derived from banner advertising, we think this research is worth a look. Both Google Display Network and Facebook got top marks for Advertiser Adoption and Advertiser Reach. But Facebook advertising was seen lagging in several key areas, such as ad targeting options, support for ad formats, and overall ad performance. (Scroll to the bottom of the page for the full research)
Some of the Study Highlights include:
- Facebook and Google both have huge potential reach, with Facebook boasting 845 million monthly active users and Google owning the world’s largest online display advertising network.
- The average click-through rate (CTR) of an ad on the Google Display Network is 0.4% – almost 10 times as high as the typical Facebook ad. Average CTR on Facebook is under 0.05%, about half the industry average for online banner ads. At the same time, costs per thousand impressions on Facebook are climbing.
- The Google Display Network offers twice as many ad formats as Facebook, including in-video ads, mobile-game ads, support for industry-standard image ads, and more.
- Facebook does not yet support mobile advertising and has more limited targeting options than Google.
The comparison suggests that Google Inc (NASDAQ:GOOG) currently offers advertisers more value in terms of both options and results for advertisers, and that Facebook has a lot of catching up to do to provide advertisers with the best possible advertising solutions.
“So far, Facebook’s advertising platform hasn’t kept pace with the explosive growth of its social network, and it remains to be seen if CEO Mark Zuckerberg even wants to focus on advertising as a source of revenue. In his 2,500+ word letter to shareholders this month, he mentioned advertising just once,” said Larry Kim, Founder and CTO of WordStream.