Facebook is no Google when it comes to advertising

Advertising on Facebook is more miss than hit. General Motors thinks so and is pulling its Facebook marketing. So what does it need to do to get more love from advertisers, asks John Lai.

 General Motors recently pulled its lucrative campaign spend with Facebook, saying the advertising isn't effective enough and it got marketers again talking about the effectiveness of advertising on the social media juggernaut. I'm one of those who have praised Facebook's innovative advertising model because of the way it is integrated into a user's Facebook experience. It displays ads that are relevant to individual users but does it work?The evidence is that Google is still the king of online advertising. Facebook is a social platform where people go to socialise and network. This means the advertising will not compel users to buy something. If we put this is in the context of being at a party, when we see posters on the wall at this party, it doesn't necessarily translate into meaning that we will buy whatever is on the poster. Facebook ads may create a conversation around a product but there are no guarantees that a person is going to buy the advertised product.Google's product offering is search and that will always be it's core strength. When searching on Google, we are specifically seeking information or products. For a company that wants to advertise, there is no better and more efficient way to try to get our attention.Don't take this the wrong way, folks, Facebook has a great business model and with the numbers it has, it is where the whole world likes to hang out. With all eyes on Facebook, it has to build a profitable business for its investors and it is hoping its mobile strategy will lead the way.Facebook is "where people hang out and socialise with each other" and its different and less valuable than advertising "to people who actually are looking to buy your product when they are looking to buy it or needing that information right there and then". This is what Google does.People tend to forget that Google is an e-commerce machine. When you want to buy something and need information, where do you start? Not with Facebook. It usually is with Google and, increasingly, Amazon. Facebook is the platform where you discuss your purchase. Yes, I'm already hearing people saying that based on the likes and interest points Facebook collects about us that it brings the brands to us. But it doesn't mean I would want to buy what is presented to me.To get a quick reality check on whether Facebook is killing Google, all you need to do is glance at these numbers:Total ReachFacebook: 51% of all Internet usersGoogle: 90% of all Internet usersQ1 RevenuesFacebook: $1.06 billion, down 6.5 percent year on year and down 32 percent sequentially.Google: $2.9 billion, up 1 percent year on year and up 0.7 percent sequentially.Click through ratesFacebook: 0.051%Google: 0.4%Average: 0.1%TargetingFacebook:

• Education
• Workplace
• Likes
• Location
• Demographics

Google:

• Interest
• Keywords
• Remarketing
• Location
• Demographics

 Ad FormatsFacebook: standard display ad, Sponsored StoriesGoogle: Text ads, image ads, video text overlay ads, mobile web game ads 2011 Total Revenue:

• Google - $40 Billion
• Facebook - $4 Billion

 [Stats by Business Insider]Stats like these underline Google's advertising strengths and it adds salt to Facebook's wound, as was shown when its recent IPO failed to do well, even though many analysis say that by being on the NASDAQ legitimises Facebook to advertisers. But I still see advertisers putting more of their trust in Google.The good thing is Facebook has found a better mix in monetising with its implementation of features like Highlight's and sponsored stories. It shows us that Facebook is putting more energy towards "chargeable content". In order for it to be consistent in generating revenue, it needs to insert itself between the customer and a brand, while clipping the ticket in some way.This is why gaming on Facebook works brilliantly, because it has slotted into the middle between a gamer and the game in the form of Facebook credits.  A good example of Facebook slotting perfectly in between user and brand is HBO's Facebook app. The app sends you an update every time one of your friends watches Game of Thrones and If these updates inspire you to also watch it, all you have to do is click buy and you are docked 25 credits or $2.50 - a kind of a more sociable iTunes.Facebook is one of the world's biggest online parties and its business model is still in a different league from Google. But what does Facebook have to do to play as equals in an area that Google has been dominating for years? I'd love to know your thoughts.