Facebook vs. Google Advertising: Which is the better Option?

This past week has been a whirlwind of hype around the Facebook IPO.  There has been an intense media following of what the stock would go for in its first day of trading.  As this multi-billion dollar feeding frenzy unfolded, I kept asking myself, how is Facebook going to make money?  If the company is valued at $100 billion, then it must become pretty creative in how to monetize itself – and fast.  One logical answer is that the company intends to generate advertising revenue (although CEO Mark Zuckerberg has never been a big fan of this approach).  I thought it might be fun to learn how Facebook advertising stacks up against Google’s advertising effectiveness.  Here are some interesting facts:

Facebook vs. Google:  Reach vs. Frequency

As the data in Table 1 demonstrates, Internet users click on Google display ads 7.8 times more frequently (.4% CTR for Google vs. .051% CTR for Facebook) than Facebook ads and four times more frequently than the rest of the Internet in general.  If you want Internet users to click on your ad, Google is by far your best bet.

If your goal is to gain name recognition, Facebook may be a better option, since ads that appear there are shown to the same user much more frequently than on Google.  In other words, Facebook tends to show the same ad much more frequently to the same people, while Google shows your ad to many more people – it is less likely that your ad will be seen by the same person.

What does it all mean?

It is useful to know that all these numbers, calculations, and other gibberish exists, but ultimately you have to ask yourself, what does this mean?  Here’s the short version:

1. If you wanted to use online banner/display ads to drive 1000 visitors to your site, you would need to have 2 million people* see your ad on Facebook.  On Google, you would need 250,000* to get 1000 people to your site (See Table 2).
2. More people see your ad on Google. People see your ad more frequently on Facebook.
3. People click on Google Ads much more frequently than they do Facebook ads.

That’s it … that is what it all comes down to.  It’s not about whether Facebook ads are better or worse than Google advertising.  One delivers more people; the other delivers more face time.  You have to decide which of these fits your advertising/marketing objectives.

Hopefully this helps you decide which advertising channel to use when you are considering your online advertising options.Hopefully this helps you decide which advertising channel to use when you are considering your online advertising options.