Google vs Facebook War of dominance in the Digital Advertising industry
What do you think Google is? Search Engine? No
And what is Facebook? Social Media? Again wrong
Don’t you ever think about how both tech giants earn?
Don’t you ever wonder why they provide free services?
Why they are direct competitors even doing different businesses?
I request you to have patience. You will find all the answers. I assure you this post will reveal facts you never knew before. After reading this post, you will start to think differently about these tech giants.
First of all, I tell you that both Google and Facebook are advertising agencies. Both have revolutionized advertising industry through the internet and digital media.
Let me tell you some history so that you can have better understand ahead.
World of advertising has always been an interesting field. No matter, how much your product or service is strong, it is of no use if the user does not know about it. So, advertisers always need effective platforms to showcase their product to their audiences. Billboards, hoardings, banners, television and newspaper ads are traditional advertising channels. Advertising is always a rewarding business. More you are visible, more you sell. The football world cup Russia 2018 was the largest streaming event in history. It provided an opportunity to advertisers to reach 44% of the world population.
Problems in Traditional Advertising
Companies have their largest expense in shape of marketing. They pay this huge amount of money because it is worth it. Every dollar is spent after verifying ROI. But, advertising also inherits some issues that make it less effective. There are three main problems in traditional advertising that make it less effective.
1. Ad Clutter
First and most important is clutter. There are so many businesses and ads that user do not pay attention. Even, they consciously started to avoid ads. According to Yankelovich, Inc, an average person is exposed to 4000-5000 ads per day. So, with time, traditional advertising became non-effective.
2. Ad irrelevancy
The second problem of advertising is an irrelevancy. Traditional advertising is based on mass reach. Advertisers just know about the mass audience. They produce a standard ad and run through respective medium i.e TV, newspaper. They do not exactly know which user is interested in our product. So, ads mostly serve the only purpose of brand awareness
3. Power of consumer choice in the digital age
Third, technology has changed the world. It is now digital age. People spend more time online. They have more power of choice. They can themselves search and review products online. Digital age introduced new trends. People love to follow their stars i.e influencers. They want product endorsement from some authoritative identity. They want to follow trends. Internet and digital age made this easy.
Due to all the above reasons, traditional advertising channels became less effective. Marketers are always in search of tools and techniques to break clutter.
First Revolution – Digital Advertising & Google
As the world entered the digital age, advertising has become a more interesting job. Now advertisers have advanced platforms and tool to present more customized ads.
First, world wide web provided this platform and businesses presented their content online. Next, Google gave it a boost through its search engine. The search engine was an effort to present the required content on a single click. This way search engine becomes a medium between user and suppliers.
Google as an advertising agency
Most people still know Google as a search engine. But in actual, Google is an advertising agency. It earns its 86% share from advertising. With success of its search engine, Google acquired power. Users came to google search with intent for find solution. So, Google had users and the keyword they were searching. This was a treasure for advertisers. Google started its advertising business in 2000 with name Google Adwords. It is now named Google Ads.
2nd Revolution – Social Age and Facebook Ads
Google ruled the advertising world for many years until a new era of social media emerged. Although Facebook started in 2004 but it gained popularity in 2010-11.
In 2011, Facebook had 800 million users and average user spent almost 2 hours daily on it. So, it started to become more attractive for advertisers to reach users. Google advertising revenues started to decrease.
In 2010, Mark Zuckerberg of Facebook was 34th richest man but ranked at 14th in 2011. In same period Larry Page of Google shifted from 11th to 15th. This was definitely a threat to Google rule. It started a war between two tech giants.
The war between Google Vs Facebook
A war started with the emergence and popularity of Facebook. Facebook revolutionized the online world through how people interact. Facebook success model is all based on people’s curiosity. People want to know more about other people like how they are doing in their life.
Google has around 100 products. Its approach is to capture each avenue of the online world. With all this power, it still seems that Google is losing in head to head competition with social media king, Facebook.
Once, Google’s Orkut was much popular but it failed as the users found more attractive medium i.e. Facebook. Later Google launched Google Wave, Google Buzz and now Google Plus but all the ventures failed.
Why this war is so heating up? Just check these below stats
- 4.1 billion internet users
- The global advertising industry is worth $599 billion in 2018.
- Internet ad spent surpassed TV ad spend in 2017
- By 2019, 1.92 billion users will be online shoppers
- By 2020, Digital advertising industry will be worth $285 billion. This figure is currently at $192 billion.
- Currently, Google has a 37.2% share of US digital advertising and Facebook has a share of 19.6%
- Advertising practices are changing due to the popularity of mobile and 4G technology. By 2023, 5G will have 1 billion users.
- The net worth of social media advertising in 2019 will be $50.2 billion that was $32 billion in 2017.
- Businesses currently have 100% ROI through google ads. It means advertisers are earning double on every dollar spent in Google Ads
- Every industry is moving towards automation. So is Advertising industry. Sophistication in advertising tool will automate 80% advertising by 2022.
- Social media are the most used platforms where online user spend 33% of their time
- 40% internet surfers say that they follow their favorite brand on social media. 37% online shoppers take inspiration from social media
Why Search Engine King wants a Social Media so desperately?
Google is currently earning its 86% revenue from advertising. Back in 2011, Google introduced Google Plus, a social media platform. At that time, it already held 41% of USA digital advertising spending.
Question is why Google needed social media so desperately?
The answer is simple, to capture more users and user touch points.
It is a game of user data. You have more users, you have more advertisers.
Because, it is a time of customized, targeted and relevant ad. Before, advertisers spent a huge amount of money to target masses. In traditional advertising, users had a feel that products are pushed to them. In traditional marketing, ads were irrelevant to most users.
With a 93% share in the online search industry, Google had a goldmine of user searches with purchase intent. Based on this data, Google ruled the advertising world for a long time. It established its empire of 100 products.
All was well until 2010 when the trend started to change. Facebook emerged as a future advertising platform with close to 1 billion users.
On one hand, Facebook was gaining popularity. Its user base was increasing. People were spending more online time on Facebook. On another hand, It was a platform which had more personalized user data. Users were sharing their personal information at social media. Personal details include name, age, work, religion, political views, likes, dislikes, affairs, relationship, and social status. Facebook was successful in offering more customized and relevant ad opportunity to advertisers.
Google was lacking this data. It was going to become a greater threat in the future. To counter this danger, Google made another attempt for success in Social Media. Google launched Google Plus in 2011.
In the digital world, war is all about data. Let’s check some data stats
- 500 million tweets daily
- Facebook is the third most visited site after Google & Youtube (Nov 2018 data)
- Facebook messenger is the most downloaded mobile app.
- 100% rise in Facebook revenue in the last 3 years
- 66% Facebook users use it daily that make 1.47 billion users
- 80 million registered businesses on Facebook
- 8 Ads are clicked per month by average Facebook user
- Facebook share of digital video ads spent is 24.5%
- 60 million active business pages on Facebook
- 8 billion daily Facebook video views
- 60 billion messages daily on Facebook & WhatsApp
Are not these stats really mind-boggling?
Hope, now you have understood why Google is so desperate for a social media platform.
Google+ booked in the trash – What’s Now?
With so many users and competition, there is a need to continuously produce new content to engage customers. As user spend more time on a platform, it provides more opportunities for advertisers.
In fact, Digital advertising industry revolves around two factors.
1. User data, we may also call it user touch points
2. User Engagement, it means time users spend on a medium
To gain more users and engagement, everyone needs more content. You may have noticed, the authenticity of data does not matter in the digital age. Both Google and Facebook have no control over their content as this content is their wealth to engage their customers. Every day, a piece of news, tweet or video goes viral to drive crazy traffic. Companies are using their maximum resources to create new avenues for customer engagement.
Facebook has more user data and engagement opportunities. In other words, Facebook has more to offer to advertise. There is around 200 user touch point in a single profile.
Google took 8 years to understand that solution to their problem is not Social Media
Google failed to realize that its competition is not social media. Its actual competition is user data i.e user touch points.
After repeated failure to collect this data from new social media i.e Google+, Google now adopted an out of the box solution. It started to integrate their other products for their core business that is advertising. Facebook was successful by using its technology Pexel that was collecting all user data and online activity.
Google took a one step ahead move. It is collecting online as well as offline user data.
By using its tools like Youtube, Android, Gmail, and Maps, it is now real-time data of users.
- 2 billion Android users
- 1 billion monthly active Gmail users
- Youtube at second after Google
So, now your email is always log in and you all data is recorded 24/7. Your all movements and activity are recorded through android even if you are offline or on airplane mode.
That is until now. Technology is an ever-changing field. No one knows what is going to happen in the future. Either one will dominate to other or new players will enter. But in this race, one thing is evident. Users have now become Product.
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