Facebook and Google are competitors. Make no mistake. It’s easy to view one as a social network and one as a search engine, but it is much, much more complicated than that. Both companies make money from advertising, and that is one major area where the competition will heat up more and more. Ultimately it’s the main area that matters from a competitive standpoint, outside of perhaps of web identity and engineering talent. They’ve competed plenty in both of those areas too.
Last week, when Google released its earnings report for Q1, the company revealed a 12% decline YoY in CPCs. SFGate.com ran an article from Business Insider talking about how things are basically moving in the opposite direction for Facebook. Author Matt Rosoff talked to a rep from marketing firm TBG Digital, who said that Facebook CPCs rose 28% over the same amount of time.
It’s going to be really interesting watching this battle once both companies are public. Facebook’s IPO is coming on May 17, based on recent reports. They’re saying the company could be valued at $104 billion.
Of course, Facebook is doing a lot of other things marketers will be attracted to. The recent release of the brand timelines is an obvious one (though not every brand is crazy about them). On that note, you might want to take a look at this infographic about what brand pages are posting and how it’s being shared:
As far as regular Facebook ads, there are certain things you’ll want to consider when running them, beyond just CPC. We recently looked at a study from TBG showing CTR based on days of the week. Check out Saturdays.
Facebook’s sponsored story ads may be unavoidable for brands relying on their own Facebook updates to drive sales or even engagement. Facebook has not made visibility in the news feed any easier.
Last week, however, Facebook did make its new Offers product available for local businesses. The service lets businesses put special offers in their fans’ feeds. I wonder how those will stack up compared to video and photo content in terms of likes.
Facebook is expected to launch mobile ads in the near future, which could be a major new revenue source for the company, though it is mobile, which many believe has been a key factor in Google’s CPC decrease. It will be very interesting to see how that impacts Facebook.
In terms of the two companies competing for ad dollars, it seems fairly obvious that if Facebook were to launch a proper search engine, which could happen, it could be a major competitor to Google’s bread and butter AdWords business. For some reason, given the fact that Facebook already has so much integration with the rest of the web, it seems just as likely that Facebook would launch its own AdSense-like ad network putting Facebook ads on third-party sites as well. Both the search engine and such a network are only speculative possibilities at this point, but it just makes too much sense for them not to happen if you ask me.
What do you think? Would you like to see a Facebook search engine? How about a Facebook AdSense?