In the brief history of the Web, only Google has enjoyed unequivocal success in online advertising. Google’s ingenious Ad Words and Ad Sense programs deliver the vast majority of Google’s $22 billion in revenue, which amounts to a quarter or more of all online advertising revenue. For years that dominance has cried out for a challenger. Now one has finally emerged in Facebook, which is poised to grow no less quickly than Google did.
That prediction may sound premature considering that Facebook this year will produce somewhere between $300 to $500 million in revenue, and sceptics still routinely question Facebook’s ability to turn a profit on its 300 million members. But take a close look at Facebook Ads, the company’s new ad platform, and you’ll see for yourself how that profit is going to happen.
I did just that in the course of using Facebook to create some pre-launch excitement for my start-up. I created a Facebook “Page,” which is a type of profile Facebook provides, free of charge, to help businesses stay in touch with customers and fans. I invited my 250 friends on Facebook to “fan,” the page, which meant they would see all updates about my new business in their Facebook profiles. About 50 joined, and the rest were probably relieved to know that this new page – not my personal profile – would be the new venue to talk up my venture.
50 fans does not exactly create a buzz fest, but fortunately Facebook Ads is there to help promote your page (or any site on the Web). In an experience that’s just as slick and simple as Google’s Ad Words, Facebook drops you into an uncluttered interface, takes your credit card information for billing, and asks you to target your ad to Facebook members using location, gender, marital status, education, age, hobbies and so on. With each additional qualifier you select, the estimated size of your target audience appears at the bottom of the page.
Want everyone in the US who told Facebook they like fishing (the subject of my start-up)? The estimated audience is 1.5 million. Add Canada, the number rises to 1.7 million. Select men only, it falls to 1.1 million. Playing with the mix is actually entertaining.
You write the copy for your advertisement, which is limited to 135 characters, and deal with a little housekeeping. How long will your campaign last? What’s your daily spending limit? How much are you willing to pay per click? Or impression? Like Google, Facebook’s pricing system is dynamic – bid more and your ad will appear more prominently and more often. Click “create,” and subject to Facebook review that takes minutes, your ad starts to appear appear on Facebook. Elapsed time, if you don’t count having fun with the audience selection tool – about 10 minutes.
In the space of two weeks, I changed the wording and timing of my ad several times, spent about $500, and now I have an audience of more than 1000 fans who follow my company’s news. That beats by a big margin the couple dozen who read my posts on a company blog I started a few months ago.
Facebook’s ad system is remarkable for its parallels with Google’s. Like Google, Facebook first built a runaway success with consumers, and only later backed into money-making products. Like Google, Facebook side-stepped a conventional online advertising model (such as selling display ads) to create one rooted in a derivative of Facebook’s core consumer appeal. Google understands what people want, thanks to the proxy of search queries, and Ad Words was built on that knowledge. Facebook, on the other hand, knows who people are, thanks to the information members provide at registration, and Facebook Ads makes it dead simple for all advertisers to exploit that information.
No less important, Facebook has copied Google’s democratic thinking about the advertising sales process. Except for the biggest customers, buying ads on Facebook, as with Google, is a self-service thing, and the little guy like me has access to the pretty much the same tools and data as big agencies and brands.
Today Google’s advertisers number a million or more. It won’t be too many years before Facebook’s are at least as numerous. Google has a serious rival, and the Web finally has a second advertising juggernaut in the making.
The next question — which is the better way to rack-up fans for a Facebook page: More advertising on Facebook or a Google AdWords campaign? That will be an interesting contest.
Ned Desmond is the founder of Go Sportn, whose first launch, coming in December, is GoFISHn. Among his former roles: board member of the Internet Advertising Bureau and the Online Publishers’ Association, President of Time Inc. Interactive, and editor of Business 2.0.
Want to see how to make a Facebook ad? Check this out >