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Archive for August, 2010

Facebook vs Google Adwords: why the fight and who will win?

August 20, 2010 5 comments

When we launched our product globally we decided to run campaigns on both Google and Facebook. I put equal amount of money on Google Adwords and Facebook for CPC campaigns. I also ran similar campaigns with more or less the same ad copy to measure the performance on Google and Facebook. Our product Shufflr requires users to download the app and then register. Hence I was measuring the performance of Google and Facebook in delivering registrations for Shufflr. I had some interesting learnings which i would like to share:

1. Over a period of one month I got 10-15% lower CPC on Facebook vis-a-vis Google

2. The number of registrations from Facebook campaigns was approx 20% more than registrations from Google

Overall CPC campaigns on Facebook were more effective and gave a better ROI than Google. There are probably a couple of reasons for that:

1. On Facebook I could target users by their place of work. For Shufflr we targeted users from technology companies like Google, Amazon, Oracle, Cisco etc. Probably these users understood the value proposition of Shufflr much better which lead to more registrations

2. Shufflr requires users to download Adobe Air. With Facebook I could target users who had shown their “interest” as Tweetdeck which meant they probably already had Adobe Air installed

3. We have a Shufflr page on Facebook which had approx 850 fans. With Facebook I could target friends of people who were already fans of Shufflr. When the friends of people who are already fans of Shufflr page see the ad it shows them below the ad “X likes Shufflr”. This probably lead to better click-thrus

4. Though I don’t have insights into the way the algorithms of Facebook and Google run, my suspicion is that Facebook is using customer click-thru data to target ads. For example if I clicked on an Oldspice ad and landed on the page and clicked on the “Like” Button then Facebook uses this data to target other friends in my friend list and shows them the Old spice ad. As more and more friends in my network click on the Oldspice ad and click on the “like” button the CTR keeps improving.

5. The combination of Facebook page “Like” button and the Facebook CPC campaigns delivers better targeting and hence improved CTR’s. So using real-time data on consumers clicking on the “Like” button on the CTR’s for campaings, Facebook does a much superior job of optimization than Google.

As a user of both Facebook advertising platform and Google Adsense I have found Facebook delivering better ROI. The Facebook Fan page and the “Like” button are very powerful missile in Facebook arsenal. I am sure other advertisers across the world are discovering the same truth and having similar experiences. To this mix add the Facebook Search which I suspect Facebook will launch at some point of time. Facebook will use the “Like” button click data to create a new page ranking system which will deliver more accurate search results because now your social network is curating content for you.

With 500+ million users who are logged on most of the time on Facebook and are clicking on “Like” buttons on Facebook as well as third party sites, Facebook is clearly winning on the ad platform. Let’s see what Google pulls out of it’s hat when it launches its version of social networking.

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Winner takes it all in the digital space

August 19, 2010 Leave a comment

Over the last one year I have constantly come across this phrase ” The winner takes it all in the digital space”. Being made of sterner stuff I ignored it, till now. In the last few months having launched a product meant for a global audience, I have begun to pay more attention to this phrase. Some of the observations that I would like to share are as follows:

1. Twitter and the social media phenomenon is forcing bloggers and journalists to pay more attention to “getting the story out first” than actually going in depth of the story. Getting the story out first has definitive advantage in creating velocity for the story i.e more retweets and social mention which then drives the Google SEO.

2. Because of the obsession around velocity of the story the focus is on companies that are very newsy or can drive a lot of retweets and social mentions etc.

3. The companies that happen to be newsy are invariably Facebook, Twitter, Google, Microsoft, Hulu. So most of the journalists and bloggers are super focused on stories coming out of these companies or stories around these companies.

4. The fact that the PR machinery of these companies are super connected to these bloggers and journalists does not help matter

5. So you now have a situation where most of the stories written are about these newsy companies. These stories are then tweeted and retweeted making these companies more newsy. It is like the self-fulfilling prophecy where the noise about these companies overwhelms the consumers and he then pushes it further in his social network and the chain starts all over again.

According to Compete, a Web analytics company, the top 10 Web sites accounted for 31 percent of US pageviews in 2001, 40 percent in 2006, and about 75 percent in 2010. “Big sucks the traffic out of small,” says Yuri Milner a Russian Investor. “In theory you can have a few very successful individuals controlling hundreds of millions of people. You can become big fast, and that favors the domination of strong people.” Milner owns 10% of Facebook today.

More and more small developers who cannot compete in the open internet space are building apps meant for platforms like Apple where the chance of being discovered is higher. In this scenario the success of small companies like Zynga, Foursquare, Groupon etc is very valuable.

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