Why Marketers Shouldn’t Compare Google ROI to Facebook ROI

“Data Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Brian Kaminski, President US of iProspect.

In the battle for digital advertising dollars, Google is the established leader and Facebook is the scrappy newcomer. While Google offers an expansive array of advertising products, marketers have built a clear understanding of which are best for driving awareness and which deliver solid transactional value.  Facebook is still a young marketing channel, and while it has had an undeniable impact, marketers are still struggling to define exactly how to best utilize Facebook’s advertising solutions.

Often overlooked is that Google and Facebook are unique sites offering different experiences—which deliver different value to marketers. Google isn’t a destination, but a resource. People use Google to find things — and while this can happen on Google’s network of owned sites, they also utilize Google as a portal to other web destinations.  During even a brief interaction with Google they’ve opened the door to multiple advertising opportunities—beginning with a user-initiated paid search ad, which provides immediate transactional value.

Even outside the realm of paid search answering a user’s immediate need, Google advertising is a powerful vehicle due to its ability to provide a variety of targeting options that can be combined across multiple destinations and devices, allowing advertisers access to all stages of the customer’s journey. As just one example, Google allows advertisers to target users based on behavior and browsing history for future display advertising anywhere online.  This may include remarketing, contextual targeting, interest targeting and topic targeting. By using multiple targeting tactics Google also provides the opportunity to effectively engage with audiences with precision (limited waste) and scalability for campaign optimization—and engage with them outside of Google.com.

Facebook, by contrast, is much more personal and self-contained. Facebook’s goal is to keep users on the core site. It has built an extensive infrastructure of functionality (email, video, messaging and so on) that keeps users on Facebook — and its inward-looking advertising strategy reflects this. Targeting by interest and demographic data are powerful tools that provide relevancy for both the user and the advertiser, but this hyper-targeting is paired with a user experience that almost actively discourages driving traffic off Facebook and to the brand’s site.  Even when advertisers have experimented with driving traffic outside the Facebook ecosystem, the results are often difficult to track and integrate with today’s analytics platforms—and thus the value is hard to define.

Here are four generalities to keep in mind about each platform:

  1. Google advertising is very effective as a performance vehicle, providing (a) the ability to use first and third party data to reach audiences, (b) massive scalability and (c) several extremely effective retargeting options.
  2. Google display advertising currently provides a wider variety of products with massive scalability, and is easily integrated into other digital advertising efforts such as PPC and its DSP, DoubleClick Bid Manager (formerly Invite Media).
  3. Facebook traditionally has been used as a branding vehicle focusing on awareness and consideration.
  4. Facebook creates loyalty and brand advocates while Google drives users to a more immediate transaction.

While both can be leveraged for a variety of marketing goals, general consensus is that Google is more performance based and Facebook is about building loyalty and gaining brand advocates. Thus, the immediate value each provides cannot be compared. Despite this fact, marketers still have to figure out how to allocate budgets. The primary challenge to defining the value of Facebook’s advertising is figuring out exactly how to measure it.  Third party tools have no access to traffic driven within the Facebook infrastructure (from Facebook ad to Facebook page), so it’s hard for site analytics platforms to quantify whether traffic from Facebook to the brand’s website is directly influenced by Facebook advertising.

Facebook is still figuring out how it can monetize its audience without compromising the user experience. Consider how long it took the company to begin actively monetizing its mobile audience, which represents one third of total site traffic.  Facebook Exchange (FBX) will be a game changer when it comes to monetizing Facebook, opening the door to direct response and performance advertisers. FBX and mobile opportunities are just developing for the holiday season, and savvy marketers won’t wait until 2013 to start testing these new features.

Facebook has to monetize its platform and compliment its current focus on user experience with effective, quantifiable advertising opportunities. To compete with Google and rebuild its image as a comprehensive solution, the company must focus on developing new products that work for advertisers, yet still be relevant to its user base.

Marketers must realize that Facebook represents an entirely new marketing channel.  It’s not paid search. It’s not display. And unlike other digital channels, its strength isn’t driving immediate traffic to a brand’s website. While Facebook will undoubtedly continue to develop its value proposition for advertisers, smart marketers will develop new success metrics built around the platform’s strengths and leverage those to determine optimum budget allocation.

Follow iProspect (@iprospect) and AdExchanger (@adexchanger) on Twitter.

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