News: Blog

The Facebook Rope-a-Dope

Last week, we wrote about Google’s expected launch of a custom audiences advertising solution similar to Facebook’s, and the “real” reason behind why they are doing so. A story out in the Wall Street Journal this morning about Facebook’s growing marketshare may shed a bit more light. Since you need to be a subscriber to the WSJ in order to access the full story, we’ll excerpt the key quotes here (bolding added for emphasis):

    Facebook said its main social network increased to 1.44 billion monthly users, up from 1.39 billion in the 2014 fourth quarter. Facebook sells ads, allowing companies to target its users based on their real identities and expressed interests rather than educated guesses derived from Web-browsing habits and other online behavior.

    That’s helping the company capture more of the fast-growing digital ad market and close the gap on leader Google.

    Facebook had 8% of the $145 billion global digital-ad market in 2014, up from less than 6% in 2013, according to eMarketer. Google accounted for just over 31%, down slightly from 2013.

    Facebook leads in online-display advertising; in mobile ads, its share is climbing while Google’s is falling, eMarketer estimates. 

    “We’re seeing success driving demand for mobile advertising and have better ability to deliver the right ads to the user,” Mr. Wehner said. “That drives better conversion for advertisers and higher prices.”

Don’t get us wrong – Google is an absolute beast and is still the dominant player in online advertising. Search advertising was the smartest invention since the wheel, and Google will continue to dominate there. But when it comes to “all other forms of display advertising” – Google is in serious trouble, and Facebook is showing up strong like a rope-a-dope boxer, landing all sorts of jabs, hooks, and knock-out blows.

Facebook has not one, but two major advantages over Google: The first one is the insane number of accurate email addresses and real customer profiles that they have on file (which continues to grow). They can use this to offer precision targeting of ads not only within the Facebook app itself – but also outside of their walls in any other logged in environment.

This brings up the second key advantage: the “must be logged-in” nature of Facebook is what enables people-based marketing. While most users are, in fact, logged into Google on desktop environments, that isn’t often the case on mobile (where Facebook is gaining the most ground while Google is losing it). Until Google finds a compelling way to get users logged in en masse to Google on their mobile browsers, they have a long, hard road ahead of them.

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