Local Online Advertising Case Study: Facebook Vs. Google Adwords

Posted by Ad Hustler | Posted in Case Studies, Local Online Advertising, Search Engines, Social Media | Posted on 10-09-2009

When I decided to do this local online marketing series I asked my good friend Dennis Yu of BlitzLocal to write a guest post.  Since you people love case studies, I asked for it to be a case study.  He obliged.  Below is a case study on Facebook vs. Google Adwords traffic on a local level.

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For our case study we sent traffic from both Facebook ads and Google Adwords to MyEstateManager.com. Below we’ll compare the data from each source and discuss the unique advantages of Facebook, as compared to Search Engine ad networks.

  • Below are graphs of Impressions vs CPM for both Google and Facebook paid traffic over a six day period. Note: Impressions are the vertical axis, and CPM is the horizontal one.
  • Google traffic is represented by an “Estate” ad group that contained keywords closely related to estate management.
  • Facebook traffic is represented by advertisements that were directed at the demographics we had identified as being the most common customer of MyEstateManager.

Graph1

Graph2

  • What we found was that Google Adwords has far more competition between advertisers than Facebook Ads. On the low end of Google’s price spectrum for our targeted keywords, we were able to get 7000 impressions in a day at a $1.6CPM. Compare that to Facebook, and we were able to get targeted traffic at equal volume for under $.15CPM – that’s less than 1/10th the CPM on Google! +1 Facebook
  • The bounce rates between the networks varied a bit as well. Google Adwords maintained a bounce rate of 48.38%, while Facebook’s was 41.54%. +1 Facebook
  • Elasticity of both curves is important to note as well. Facebook’s curve is exponential, while Google’s is basically linear.
  • Key Factors: One reason for that is the difference between network ad space and placement. Google has 10 ad placements on the first page, while Facebook advertisements only have the chance to appear in about 3 different spots. You can steadily bid up on Google to increase your ad position, while all the inventory on Facebook is divided amongst a few placements—if you aren’t showing up in these, you aren’t showing up at all. Another factor is competition; Facebook doesn’t have nearly as many publishers competing for the ad space, so a small change in Facebook CPM will make a greater difference than the same change in Google CPM.

Facebook Targeting as an Alternative to Search Engine Targeting

  • iStock_000004945204There is other value in expanding advertising campaigns to Facebook that separates it from other Search Engine ad networks. In Facebook, users self-identify (gender, age, vocation, interests, etc) and can be targeted by who they are. Search Engines, such as Google restrict you to primarily targeting keywords, which means you target people based off of what they are looking for. That can lead to some difficulties depending on what your strategy is; for example, if you are a company that does primarily B2B marketing you may have keywords that show up in both B2B oriented searches and in consumer searches—take the keyword ‘cell phone cases,’ for example, a business that makes cell phone cases that are sold through other stores (Best Buy, Radio Shack, etc) wants to get business from people who will buy from them in bulk. They’re not interested in Joe Teenager who wants a shiny new case for his iPhone. On Google, it’s difficult to to screen out Joe Teenager and get John Executive Purchaser. On Facebook, because of the self-identification data, it may be a bit easier.
  • Target your viewers effectively: Below are several targeting tips to apply to your Facebook campaigns.
    • Separate your ads to target males and females separately: men and women will almost always click at different patterns.
    • Tighten your age groups: instead of targeting all males or all females, narrow it down to 4 or 5 years apart max. Different ages require varying ad copy as well.
    • Make your users feel like your product is up to date. A good way of doing this is mentioning the month in your ad copy, or even related current events.

    Ad1

The main difference between these two ads is the picture, but that makes a significant difference. The ad on the left maintained a CTR of 0.08% vs 0.03% for the one on the right. Lesson: Users are more likely to click on an image that includes a person’s face.

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Comments

  1. I found your blog on MSN Search. Nice writing. I will check back to read more.

    Eric Hundin

  2. in this case study though, which one gave the action you were hoping for? though facebook was cheaper adn better targeted did you get the action you wanted from it?

    appreciate the series you are putting together. thank you for your time and research into it.

  3. Good post Dennis & Brandon!! Keep em coming!

  4. I’m super stoked Adwords and Facebook were compared against each other here. I’m also interested in which traffic source backed out better in this case study.

  5. Great post Dennis! However, CPM and impressions, those numbers are all well and good, but the bottom line is the conversion rate. How well did FB convert vs. Google? I think it would be safe to say most would like to see those numbers.

  6. @kiley
    @riley
    @john

    Ah, good question! The Facebook traffic quality was FAR worse, evidenced by both bounce rate and lead conversion. However, when you’re looking at 30 cents versus $3 a click, Facebook still wins.

    The other benefit, which I never hear folks mention, but is absolutely HUGE, is branding. Just like with TV and radio ads, there is implicit (but hard to measure value) in impressions. Once people see the brand enough, they get familiar with it and begin trusting it for no other reason than they’ve seen it a lot.

    Remember that impressions are FREE. So branding is FREE. If you’re an affiliate marketer, you’re likely more interested in the end conversion, since why would you want to help build the business’ reputation at your expense? But if this is your client, then you have to invest in brand building, since it results in conversions later.

    Love to hear other people’s experiences here. We have a dozen more case studies comparing other sources of traffic and campaign tactics for local. Happy to share here with Brandon, on our blogs, on Facebook, and on your blog!

  7. Good one Dennis & Brandon keep going I look forward your other postings.

  8. I helped make those ads!

  9. Great post proves what I thought to be the case that at the moment Facebook is offering better value for money than Google Adwords.

    However, I suspect that Google is better at the Desire and Action stages of the AIDA model than Facebook whereas Facebook is better for Awareness and Interest because of the difference in why people are using the two sites. With Google people are actively searching out information or wishing to buy. On the other hand Facebook is a social activity. The difference is equivalent to display and classified advertising in print.

    Given the lower costs, the high page impressions, the ability to use images, more text and the relaxed nature of Facebook users, Facebook currently presents a great value and targeted way to brand build.

  10. [...] Facebook and Google PPC advertising are very different propositions. Google AdWords is very good for direct advertisers as you know that if someone types a search term in to Google they are looking to buy or seeking information to support a purchase. On the other hand Facebook users are relaxed and therefore because of this it is great for brand building and awareness advertising. They may not buy immediately but they take note that you are there. So to use a press analogy, Google is the equivalent of classified and Facebook is display. For further comparisons between the two, there is an excellent case study of Facebook vs Google advertising at the Adhustler blog. [...]

  11. I can say that your case study & its interpretations by Dennis are not only brings value to readers in terms of creating options, but also gives a chance to consider beyond usual trend. But why is it that you haven’t considered other options to compare?

  12. [...] as the user is relaxed. However, if blue chip advertisers such as Capital One, pick up on Facebook the great value that is currently offered by Facebook will diminish, as they can afford to bid up the cost per [...]

  13. [...] Hustler Local Online Marketing Series The Ugly Side of Local Online Advertising Local Online Advertising Case Study: Facebook Vs. Google Adwords Google Adwords Local Targeting Is Badly Flawed Google: Get Your Local Targeting Act Together Hell [...]

  14. [...] ? ??????? ? ????????: ??? ? ???, ? ??? ???. ?????????? ?? ???????? ???? ??????? [...]

  15. [...] contextual campaign. Facebook ultimately gave 1/10th of CPM adwords gave. You may read complete case study here. (However, author failed to mention actions figure from these campaigns, which would be really [...]

  16. I have tried advertising on Facebook. For my local business I didn’t have much success and it really wasn’t any cheaper than Google

  17. I used both of them. To me Google adwords worked far better than Facebook ads. Google rocks, always.

  18. Adwords are better than Facebook ads. Later one is good for promotions only.

  19. I haven’t really advertised on facebook yet.. but this is great insight… however google adwords is great I have experienced alot of success… great post

  20. Facebook can drive traffic, but conversion to lead (contact form or phone) is close to nil. It is most definitely a branding platform, not a transaction platform.

  21. [...] is therefore that Google’s ‘eyeballs’ are a lot more valuable as a result. This and that study I recently saw, show that Google’s click-through-rates are ~10x that of Facebook.  [...]

  22. [...] is therefore that Google’s ‘eyeballs’ are a lot more valuable as a result. This and that study I recently saw show that Google’s click-through-rates are ~10x that of Facebook.  I have [...]

  23. [...] Advertise. Facebook advertising works very much like Google’s, you pay for impressions or click through’s and bid on how much this is worth. Here is a very handy case study showing the advantages of Facebook advertising over Google’s. http://www.adhustler.com/local-online-advertising-case-study-facebook-vs-google-adwords/ [...]

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