Why Facebook Has Google over a Barrel: Social Ads

 
 
By Clint Boulton  |  Posted 2010-11-15 Email Print this article Print
 
 
 
 
 
 
 

FB Vs. Google.png

When we journalists talk about the rivalry between Google and Facebook, which Columbia Law School Professor Tim Wu sees (WSJ paywall) as our new resident monopolists, we tend to speak in blanket scenarios.

We might juxtapose the fact that Google has 1 billion searchers to Facebook's 500 million-plus users with the fact that Facebook is now leading Google and other Internet powers in minutes users are engaged on the social network.

We might compare that Google owns search advertising with the fresh stat that Facebook now serves 23 percent of display ads.

Forget all that, says Ryan Singel in a deep-dive post that gets to the meat of why Facebook scares Google so much.

He argued it's because Facebook with its Like Button and other social plug-ins, has found "a way of placing ads anywhere on the Net with a granularity Google can only dream of -- in no small part because Google promised its users never to go down that path." Singel added:

One, there's so much interaction and information being shared inside Facebook that it has become a decent-sized replica of the Web inside the Web. And Google can't crawl and analyze much of what happens in there. That's a problem when your goal is to organize the world's information. Google is blind to this because much of what happens on Facebook remains in Facebook. ... The problem is that Google built a wall between user search data and advertising -- and the mammoth financial success of AdWords proved that the separation was fine at the time.

Two, Facebook knows who you are and has the right to use that information because you explicitly gave it to them. Google has different kinds of data that reveal a lot about who you are and what you are interested in -- some of it very private. But very little of that data is information you explicitly told the company to share, and they've assiduously promised not to use your search history and e-mail data to profile of you.

It presents an interesting pickle for Google, vilified a few short years ago for even suggesting it would do behavioral tracking for users via its search engine. The company danced around this with "interest-based ads," which essentially do that.

Yet Facebook comes at it from a social angle, and it's already propagated across the Web like one big advertising virus.

Facebook is taking heat for this from privacy advocates frightened of Internet powers tracking users' surfing habits and collecting the data on them. But Facebook does it nonetheless when people opt in by "liking" Web pages and such.

My thought on this is that Google is a victim of more paranoid times, that political pressures around online behavioral tracking years ago forced it to be conservative in behavioral tracking.

Facebook is able to successfully leverage social advertising because, well, if people say they "like" something, they know what it means. That makes it hard to pick a fight with, let alone prosecute, the company.

Singel does a good job explaining how Facebook doesn't collect data in a way that will necessarily concerns users, mostly because Facebook doesn't use a third-party ad system to track people around the Web but Congress won't grok that. There is now a knee-jerk reaction on Capitol Hill to this stuff.

Online privacy legislation will crack down on the efforts of Facebook, Google and others, leveling the playing field for all behavioral ad targeters.

The question is whether this occurs in enough time for Facebook to blow ahead of Google in online advertising, eyeballs and, ultimately, cash.

But let's be clear; people aren't going to cease Googling or Facebooking anytime soon.

It took almost a decade before we realized how dangerous Google was for Microsoft, and, while Microsoft's online business is in the doldrums, it's Office and other legacy software businesses are still the businesses to be in. All apologies to the shiny, new cloud.

That will be the case for Google's current cash cow, the search keyword ads, which the company is itself evolving with Product Listing Ads and other ad types.

They may seem old-fashioned and lifeless to Facebook and the other new mavericks, but damned if they don't bring Google more than $23 billion a year in advertising.

Over time, it's not inconceivable that social ads, led by Facebook, will be the dominant ads on desktop and mobile platforms.

 
 
 
 
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