As Facebook has entered the mainstream marketing mix, marketers are having to decide how much of their budget to divert from other channels into social campaigns.
Because search gets the lion's share of a digital marketing budget, it might seem like the most likely candidate for a cutback -- after all, there's usually so much of it. But marketers might want to think twice before jumping to that conclusion, because it may very well be a blind leap of faith.
In the last year alone, the only thing more impressive than Facebook's growth has been the buzz around it. Users, page views, estimated value, and a Hollywood blockbuster all seem to point to "the next big thing" -- something that all marketers should want to be part of.
In reality, Facebook marketing offers a very different value proposition from search marketing, and results-driven marketers can still get a much better return our of search than they can out of social.
Facebook: The Prodigal Channel
The last year has been nothing short of a series of achievements for Facebook -- both as a social network, but also as marketing platform. Indeed, some of its marketing milestones have included:
- Pushing out Like buttons
- Launching LBS product Facebook Places
- Launching Facebook Deals
- Generating nearly 25 percent of all page views in the U.S. -- more than double that of Google and YouTube combined
- Launching sponsored stories
Not to mention all the publicity from "The Social Network" ($96.4 million box office and numerous awards) and Mark Zuckerberg being named TIME's Person of the Year.
With Facebook also boasting close to 600 million users (or more, depending on who you believe), no one can deny that Facebook has become an attractive marketing platform. But there are different kinds of marketing platforms. As much reach as Facebook can provide, it doesn't offer the same kind of impact as search.
To that extent, Facebook and search offer very different value propositions. Indeed, comparing search and social is like comparing apples and oranges.
Search vs. Social
Despite Facebook's phenomenal growth and all the speculation about Facebook displacing Google and taking over search, Google (and search, in general) can still offer marketers a better ROI on their ad spend.
Granted, Americans might spend more than six times as much time on social networks as they do searching. But while Facebook's 2010 ad revenues are estimated at $1.86 billion, Google posted $6.77 billion in revenue in Q1 2010 alone.
Why is Google still raking so much more than Facebook? Well, part of it has to do with Google having already hit critical mass, but part of it has to do with the value that Google offers marketers over Facebook.
Search and Intentional Targeting
Google listings (paid or organic) are keyword driven (i.e., results are served up by keywords that are either typed into a search bar or exist on a page alongside AdSense ads).
As a result, Google listings leverage intent. Basically, when a user is searching for something, they are actively interested in it. They are already in a mindset where they want to know or have more.
And because these users are already interested in the keyword at the moment the listing/ad is served, this makes them a much more qualified and targeted prospect from a marketer's point of view.
Admittedly, keywords are one of the variables that Facebook relies on to serve up ads. More specifically, the Facebook algorithm looks at keyword themes that occur throughout users' social graph and therefore reflect their interests.
And as a targeting metric, interests do tell advertisers a lot about a user's personality. But they tell marketers nothing of a user's intent -- their mood and what they're doing at that time.
Just because someone is interested in certain kinds of products in general, that doesn't mean that they are interested in buying any at any given time. For example, I might be a hot-rod enthusiast. But that doesn't mean that I'm looking to buy another hot rod, or can even afford one for that matter.
Social Intent vs. Search Intent
More importantly, Facebook ads not only fail to gauge what a user's current intent might be, but they fail to acknowledge what Facebook know a user's intent is.
Essentially, most Facebook users log on to socialize, not buy. In this respect, Facebook ads can make you look a lot like the guy who goes around a cocktail party trying to sell insurance.
Social intent is probably one of the main reasons that Facebook's average CPM ranges somewhere between 13 and 53 percent below the industry standard. Indeed, as ClickZ reported, Facebook ads get half the clicks of network banners and the average click-through rate (CTR) for Facebook ads in 2009 was 0.063 percent and 0.051 percent in 2010.
Conversely, the average CTR on AdWords is around 2 percent. That's 20 times the industry standard and almost 40 times that for Facebook ads.
This is probably because many search sessions revolve specifically around making a purchasing decision -- maybe not buying right then and there, but deciding how the user will buy when they're ready. And when they are ready, there's a decent chance they'll return to Google to recall that product or purchasing decision they arrived at during previous sessions.
Context is Everything
Given Facebook's position in the marketplace, this isn't to say that Facebook ads should be ignored by marketers. Indeed, Facebook has become such mainstream channel, that it can't be ignored by certain advertisers. As this Webtrends study points out:... industries that are fun to discuss with our network are seeing higher CTR. ... Brands that are social get a higher CTR, which translates into better engagement metrics: Post Quality Score, EdgeRank, Feedback Rate, and others. In turn, Facebook rewards such behavior with a lower cost-per-click and greater visibility in the News Feed.
It's the marketers and/or campaigns that are driven by results, however, that should think twice before investing too much into Facebook -- especially if investing in social means diverting resources from search. Search offers marketers a degree of intentional targeting that social cannot.
Social users are (possibly 40 times) less likely to be in a purchasing mindset. While Facebook might represent a great opportunity for brand-advertisers, search (whether it's paid or SEO) still offers a much better return for marketers who are focused on their bottom line.
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