Google display ad boss Jason Bigler is not surprised that General Motors, the nation’s third-biggest advertiser, has cut its $10 million Facebook ad budget to zero because Facebook advertising “doesn’t work.”
Yesterday, he tweeted: “Seriously folks, did you really expect consumers to be in transactional mindsets on Facebook?”
Thing is, Jason is right.
Facebook is no Google, and there is one plain reason why: Google has the perfect online advertising product and Facebook doesn’t know what its online advertising product will be yet.
Google’s perfect online ad product is the search ad. Search ads are perfect because the people paying for the ads know that the people looking at the ads want to see them. Consumers go on to Google and search for products or information about products, and Google shows them ads from the company that makes that product (and ads from its competitors).
There is no guesswork in the targeting of Google ads. The same cannot be said for Facebook ads. Facebook ads are targeted the old-fashioned way.
When an advertiser buys air time for a commercial during a particular TV show, it’s because that advertiser has been told by the TV channel what kind of people watch that TV show, and the advertiser has decided that those kinds of people are the kinds of people it wants to reach.
Facebook does the same inexact thing: It sells ads targeted based on the kinds of people who will see them.
The only advantage Facebook has over TV advertising, right now, is that because Facebook users say a lot about themselves on the site, Facebook can tell its advertisers a little more about the kinds of people who will see their ads.
The major disadvantage Facebook has versus TV is that its ads are very easy to ignore because they are tiny and shoved into a corner on Facebook.com, and they are usually not very good at telling appealing stories about the companies paying for them.
If you were an advertiser, which ad would you buy first: the search ad, which will definitely be shown to a consumer who is looking for information about your product or a rival’s product; or the other kind, which will will be shown to a group of people that you think might be interested in your product?
You buy the search ad first.
Now, let’s figure you have some money left over.
Let’s say you want to buy an ad that will reach a certain group of people because you think there are some people in that group who haven’t yet realised that they want to search for information about your product, and you’d like to convince them to do so.
Do you even buy a tiny, easily ignored Facebook ad then?
Or do you buy a pretty TV commercial, which is harder to ignore, and does a much better job of telling a story about tampons or toothpaste?
Probably, you buy the TV ad first.
And that’s why Facebook’s advertising business isn’t accelerating like it should – or even accelerating at all. It hasn’t invented an advertising product that is much better than the alternatives that already exist.