Google vs. Facebook: Who has the stronger mobile advertising strategy?
By Chantal Tode
October 26, 2013
Target promotes its Cartwheel app on Facebook
Google and Facebook are increasingly going head-to-head on a number of fronts in mobile advertising, including performance marketing, a traditional area of strength for Google’s but one where Facebook is quickly gaining.
Google continues to be the leader in mobile ad revenues but Facebook is expanding its offerings rapidly, just last week adding video ads in the mobile newsfeed and giving a preview of what ads in Instagram will look like. Facebook also gave advertisers the ability to bid for mobile app ads on a cost per click basis for the first time, signaling a more performance-marketing orientation.
"Those of us who have been around in ad tech for a while still remember the old Google AdWords slogan, 'It's all about results,'” said Sephi Shapira, CEO of MassiveImpact, Tel Aviv, Israel. “In a twist of fate, Facebook has taken the essence of this tagline and pushed forward; taking the lead on the mobile performance front with its recent launch of pure results-based advertising.
“Growing from zero to hero in a single year, Facebook was nonexistent in mobile advertising on its IPO date,” he said. “It now commands 16 percent of the mobile display ad market.
“This stellar growth is writing on the wall. It is time for Google to revisit its original vision and incorporate into its product offering a pure performance model."
Transparency vs. performance
Mobile ad buying is happening along two trends – either transparency or performance, per Mr. Shapira.
Transparency-oriented buying happens when big brands want to reach the right users to increase brand equity and demand transparency about who has seen their ad and when.
In comparison, advertisers who focus on selling products on mobile devices at a profit care primarily about ad performance return on investment.
Google is using Enhanced Campaigns to help drive its mobile advertising business
“To gain or maintain market leadership, companies must choose one meta-trend as their core focus,” Mr. Shapira said. “It is clear to me Facebook has decided to go down the performance route."
One way Facebook is competing more directly with Google is when it comes to mobile video.
Facebook recently introduced video ads in the mobile newsfeed. This is significant because of Facebook’s scale and high levels of engagement.
The challenge Facebook will face with this strategy is if users find the ads to be intrusive, especially if the ads are auto-play as has been suggested.
“Facebook’s move to mobile video advertising could certainly give advertisers another option for video ads that may well drag ad dollars away from YouTube,” said Mark Pinsent, social and content lead at Metia, Seattle, WA.
Facebook is also competing more directly with Google these days when it comes to retargeting.
For example, it launched a new retargeting tool that will allow retailers to show ads to people who have visited their Web sites or mobile apps that is distinct from Facebook's FBX ad exchange.
“This is the kind of opportunity that could move the needle at Facebook because it fulfills the need for marketers who are focused on generating conversions and sales, a massive group of people who haven't been able to find much value with Facebook advertising yet,” said Marc Poirier, co-founder and chief marketing officer of Acquisio, Brossard, Canada.
“These marketers are quite familiar with Google AdWords remarketing, a self-serve product that is part of Google AdWords and delivers great value - more conversions and better ROI,” he said.
Brand advertising is one area where both Google and Facebook would like to have a stronger play in mobile.
Facebook has been refining targeting capabilities in order to attract more brands. The move into video ads is also seen as a play for brands.
Google is reportedly looking at creating richer, more engaging advertising opportunities to attract brands.
For example, Google recently started testing banner ads in search results on desktop to provide a more visual template for traditionally text-heavy paid search.
However, both Google and Facebook could face a significant competitor when it comes to brand advertising on mobile in the form of Twitter.
While Twitter has no near the reach of either, it is the more organically mobile offering that is better positioned to take advantage of real-time opportunities to drive engagements for brands. For example, Twitter is building out its TV-oriented offerings so brands can leverage the social conversation happening around the broadcast programs they are advertising in.
One area marketers will be keeping an eye on is when Facebook brings its programmatic solution FBX into mobile, as it is reported to be doing in the coming months.
The DoubleClick, FBX partnership is not likely to extend to mobile.
Even as Facebook and Google begin to compete more directly in mobile advertising, they are also cooperating more in some areas. For example, the two recently agreed to allow DoubleClick clients to buy retargeted ads for desktop on FBX
This is happening as Google continues to struggle with making money in mobile. The company recently revealed that CPC rates dropped 8 percent during the third quarter, pointing to the ongoing issues Google faces as search use continues to move to mobile but advertisers’ budgets are not transitioning as quickly.
To address its mobile challenge, Google has introduced new initiatives such as Enhanced Campaigns, a bigger focus on voice search, decreased keyword visibility and total conversion metrics.
“Facebook has said they will be pulling mobile FBX in house and not working with outsourced partners like they do for desktop, so the Google announcement does not include FBX Mobile,” said Shaun Farrar, vice president and group media director at DigitasLBi Boston. “I believe this offering will be attractive to many advertisers as it will allow them access into Facebook's mobile Web and mobile apps.
“This is where the growth in time spent is happening across Facebook,” he said. “It could make an initial dent with Google, but Google has plenty of opportunities to grow via YouTube, mobile search, so I don't believe it will have much of an impact with them especially if Facebook continues to get $0.50 CPM bids or less.”
Chantal Tode is associate editor on Mobile Marketer, New York
Related content: Advertising, Google, Facebook, mobile advertising, FBX, YouTube, MassiveImpact, Sephi Shapira, performance marketing, mobile video, Metia, Mark Pinsent, retargeting, Acquisio, Marc Poirier, Digitas, Shaun Farrar, mobile marketing, mobile
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