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Facebook recently announced it has hit the major milestone of 500m users, following hot on the heels of the news that, in the US, the site has overtaken Google for the first time. This is truly remarkable growth for a site that only launched in 2004.

However, can we judge the effectiveness of Google vs Facebook based simply on the size of their respective user bases? Should we be diverting more budget towards Facebook at the expense of search?

To answer these questions, we have to get beyond the popular headlines and delve a little deeper into the numbers, so apologies in advance to any arithmophobiacs

The size of opportunity

One useful measure of online advertising effectiveness is CTR (Click Through Rate). The average CTR for search is 1.27%, compared to 0.09% for display (ie the majority of advertising on Facebook).

In other words, people are 14 times more likely to click on an advertising message they encounter via search than one they see on Facebook. By this measurement you can suggest that Facebook would need around 7bn users in order to represent a similar sized opportunity as Google.

Bearing in mind that the entire world’s population isn’t expected to hit that figure until 2011, that’s asking a lot, even for Facebook.

True, Facebook is a much less mature advertising platform than search, meaning methods are not as advanced. However, with time marketers will learn how to improve the CTR they are getting from Facebook. For example, we are already seeing Facebook CTRs increase as a result of automated creative rotation. This combats creative blindness from the same creative being presented to the same user on a number of occasions.

Does size matter?

So, Facebook is undoubtedly growing in importance, but Google is still out in front, in terms of the size of opportunity. However, maybe size doesn’t really matter.

Whilst there are similarities between the two advertising platforms, they are essentially fighting different battles but for the same budget. It’s important to understand this size of opportunity that Facebook presents compared to Google. It is also worth remembering the subtle differences that exist between the two advertising platforms.

Search marketing has risen to prominence mostly based on its engagement, as opposed to the interruptive nature of traditional online display advertising. Search puts your brand in-front of consumers at the time they are signaling purchase intent for one of your products or services.

Conversely, Facebook is more of a hybrid between search marketing and traditional online display advertising. Whilst having a similar Cost Per Click (CPC) pricing model as paid search it still has the interruptive nature of traditional online display advertising.

Facebook takes this interruptive advertising to a more targeted level. By tapping into information in a user’s profile, as well as the enormous amount of personal information a user typically adds to their site every day, Facebook makes it possible for brands to target groups of people at an extremely granular level. You don’t just segment on basic demographics (age, gender etc) but can go as deep as targeting people on the basis of their favourite film.

Essentially, with search you’re buying keywords, but with Facebook you’re buying an audience.

But despite all of this, I still think there is a fundamental reason why search will remain extremely relevant for many years to come, and that is related to how people use Facebook.

Today, Facebook is used by most people to stay in touch and interact with others, whereas search is still the place that people start when they are looking to research and purchase a product or service.

Certainly, the engagement phase of a marketing campaign can take place on Facebook, and display ads can be used to build awareness and understanding. But when it comes down to the transaction, search is where it’s at.

Of course, you might be thinking that the transaction-based world of search would benefit hugely if it could be married to some of the segmentation of Facebook. And perhaps you’d be forgiven for then having the reaction that “my campaigns are way too complex already. There is no way I can do both.”

I think that you can and explaining how this is possible will be the subject of my next post. Stay tuned.

Ed Stevenson

Published 4 August, 2010 by Ed Stevenson

Ed Stevenson is Managing Director (Europe) of Marin Software, a paid search technology firm, and a contributor to Econsultancy. He also writes the Big Search blog. 

20 more posts from this author

Comments (3)

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Sean - Blogging Strategies

Most of all online activities start from search and if you look at the highest populous countries India and China, most of the online users are engaged on various social networks while facebook comes very much below to them. Say for example most Indians are addict users to Orkut, next connect on Yahoo and Gmail. And in almost all PC's used at Internet Points the default homepage is being set as either Google or Yahoo, even at home PC's. So what I mean here is, unless Facebook got used by these populous nation it cannot look for immense growth in its accounts ;)

almost 6 years ago

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Dawn Clarke, Marketing Communications Manager at SeeWhy

The debate on Google versus Facebook will grow as the services offered by both parties evolve. The introduction of Facebook Like however has thrown the gauntlet down to challenge Google. Like is rapidly becoming an index of content on the web, where the index is built based on mass popularity as opposed to an arbitrary Google algorithm. The impact of this cannot be underestimated. Within 24 hours, Facebook had served 1 billion ‘Likes’ and after only six weeks, more than 100,000 sites had implemented Facebook Like.

Emarketers have quickly seen the potential of Facebook Like. In a recent survey by SeeWhy Inc, almost 7 out of 10 of the emarketers polled have already implemented Facebook Like or plan to implement it. There is a great blog that goes into more detail on this here: http://bit.ly/b8PMyS.

almost 6 years ago

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facebook

China, most of the online users are engaged on various social networks while facebook comes very much below to them. Say for example most Indians are addict users to Orkut, next connect on Yahoo and Gmail. And in almost all PC's used at Internet Points the default homepage is being set as either Google or Yahoo, even at home PC's. So what I mean here is, unless Facebook got used by these populous nation it cannot look for immense growth in its accounts ok.

almost 6 years ago

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