Web Metrics & SEO: Google AdWords and Facebook Advertising

For the first time in history, online advertising is projected a higher spend than print magazines and newspaper spend in 2012. According to a study by eMarketer, online ad spend is expected to generate $39.5 billion in sales in 2012, an increase of 23.3% from 2011. (Indvik, 2012) With so many companies throwing more dollars into online advertising spend, the space is becoming cluttered and marketers are beginning to look at how to better target their online advertising to consumers that are more likely to respond to ads. So, where should you spend your advertising dollars? Spend money where your target customers are, and more than likely they are using Google and Facebook.

Google Adwords averages a click through rate of around 2%, which is a substantial statistic compared to average online click-through rate statistics. Brands have seen the success of this platform, and are not afraid to spend millions of dollars on campaigns. For example, AT&T spend more that $8 million on AdWords in the month of June 2010 gearing up for the iPhone 4 launch, with other brands such as The University of Phoenix, Expedia, eBay and Amazon all spending over $5 million a month each. (Learmonth, 2010)

The key to Google Adwords is that the advertising is targeting to people who are already looking for a product or service similar to your company, i.e. “dog groomer in Dallas, TX” pops up a local business. Since many people’s first inclination is to go to Google and search for things they are looking for, the chance of capturing consumers and changing their behavior is greater while they are in this active search phase of the purchase process. According to Google, 8 out of 10 internet users see AdWords each month. (GoogleBusiness, 2009) These ads require no minimum spend, and the total spend per day can be capped at anything the advertiser wants. Payment is done on a CPC basis, and advertisers bid on the key words they want their ad to show up on during a consumer search. These ads are quickly adaptable and can be changed, turned on or turned off at any time, making them ideal to advertisers. Google also hosts a detailed analytics system that allows advertisers access to their ad performance, making it much easier to analyze and make data driven decisions quicker than other advertising platforms.

While Google AdWords in certainly more popular than online advertising methods, Facebook has entered the online ad space and has unique offerings for advertisers. Facebook ad spend has experiences a 1600% growth over the past year – a number that almost seems unreal! (Eler, 2012) Facebook sets itself apart by allowing advertisers to customize the links in their ads to either outside websites (such as a company home page), or to Facebook features the advertiser owns, such as a group, page, application, or event, and can also include images. The targeting capabilities are extensive. Advertisers can target as broad as 25 countries to as specific as a local city. The ads also pull information based on profile data and IP addresses, and the advertiser can target based on marital status, interests, work or school experience, and even target only specific connections of current consumers engaged with the brand on Facebook. Similar to Google Adwords, advertisers bid based on the targeting parameters set forth, but can bid based on a CPC or CPM basis. The biggest difference between Facebook and Google Adwords is that Facebook will be served as regular display ads within the social platform, and consumers are not actively seeking the information server as they would be using Google. This explains why Facebook ads have a click through rate much lower than Google, at only 0.051%. (Lewis, 2011)

References:

Eler, A. (2012, February 1). Report: Facebook ad spending grew

1600% in 2011. Read Write Web. Retrieved June 7, 2012, from http://www.readwriteweb.com/archives/report_facebook_ad_spending_grows_1600.php

Facebooktutorial. (2010, April 5). Facebook tutorials – How to

advertise on Facebook. Retrieved June 8, 2012 from http://www.youtube.com/watch?v=8jOBDIql4yc

GoogleBusiness. (2009, June 15). Getting started with Google

AdWords. Retrieved June 8, 2012, from http://www.youtube.com/watch?v=tx2L6EGa9DY

Indvik, L. (2012, January 19). Online ad spending to surpass print for

first time in 2012 [study]. Mashable. Retrieved June 10, 2012, from http://mashable.com/2012/01/19/online-advertising-surpasses-print-2012/

Learmonth, M. (2010, September 6). What big brands are spending on

Google. Ad Age. Retrieved June 7, 2012, from http://adage.com/article/digital/big-brands-spending-google/145720/

Lewis, M. (2011, December 28). Google AdWords vs. Facebook