Which is better for advertisers — Facebook or Google? With a $100 billion valuation of Facebook leading up to its IPO last week (half of Google’s worth), that’s a question everyone is asking. Considering how important advertising revenue is to both companies (Larry Kim of WordStream reports reports that Google generates 96% of its revenue from advertising, and Facebook generates 86% of its revenue from advertising), it’s not surprising that a great deal of focus is being put on the future of each company’s advertising programs.
WordStream tried to answer the question by doing some data crunching that compares Facebook Advertising to the Google Display Network advertising program. Of course, Google has had a lot more time to build the Google Display Network than Facebook has had to build its own advertising programs, and that’s one of the main reasons why WordStream found Facebook Advertising to be inferior to Google Display Network today. But that’s not all. WordStream actually found Facebook to be inferior to Google Display Network in five key areas: advertising reach, advertiser adoption/growth rates, ad performance, ad targeting options, and ad formats. You can see the infographic below.
Both Facebook Advertising and the Google Display Network offer significant reach opportunities to advertisers, but click-through-rates of 0.4% for Google Display Network ads is nearly 10 times higher than the 0.055% click-through-rates for typical Facebook ads. The Google Display Network currently offers a lot more ad format and targeting options than Facebook, and Google incorporates a mobile component to its advertising program, which Facebook has yet to do.
Bottom-line, WordStream found that Facebook offers less value in terms of advertising options and results than the Google Display Network does. Despite the fact that Facebook has grown to include a huge global audience, advertising has not grown at a similar rate. Facebook has the potential to become a key online advertising player, but there is still a lot of work to be done to attract and retain advertisers, as General Motors’ recent decision to end its advertising initiatives with Facebook demonstrates. Advertisers need a higher return on their investments from Facebook. Until the company offers ways to do that, advertisers will stick with the Google Display Network.