Facebook vs. Google – round 2

This time around, the emphasis is ads.  Both have unique approaches to serving up more content, which generates lots of ad dollars for both outfits, but there is a challenge.  Many of us sit in front of a computer for hours a day right?  Some of us even visit these online social circles,  but quick – name three of the brands you saw in online display ads within the past 24 hours!?

Too hard, then try this: Name three you saw in the past week, month or more?  Can’t do it?  You’ve just put your finger on one of the biggest problems both of these networks are facing, and ndustry knows it.  Many say the online marketplace is future of advertising – but if companies are throwing away millions of dollars a year, and not getting any ROI – how long do you think that will last?  Everyone naturally assumes that’s where you need to be advertising, because thats where are the cool kids are right?

Facebook & Google (commonly referred to as David, and Goliath) set out to solve this challenge somewhat differently, first Facebook with its “walled garden” application strategy, and Google thru its openSocial initative.  Imagine for a moment, what an online entity that commands the attention of tens of millions of users – say, Facebook or Google – could do if it managed to transform brand advertising from a nuisance to something people actually could use, or God forbid, actually like? 

Facebook was the first to try to crack the problem.  Facebook users happily offer up priceless demographic data via their home pages, and the network encourages friends and acquaintances to form links and stay apprised of one another’s activities through a “news feed” – a kind of personal wire service that lets you track the updates your friends are making to their pages.  That is the network Zuckerberg has opened up for advertisers with his new service, Facebook Ads.  Now, whenever Facebook users rent movies at Blockbuster.com, they may be asked whether that information can be shared with their friends.  if they click yes, their friends’ news feeds will receive that information, sometimes with a word from the sponsor.  Zuckerberg’s pitch is that “nothing influences a person more than a recommendation from a trusted friend.”

Google on the other hand is a bit behind in this “social” networking space, its own site, Orkut, which is big in Brazil and India hasnt caught on here.  So they instead are going a different route, equally impressive – they unveiled a competing social alliance of social networks – an un-walled garden in which everybody but Facebook can play.  Google pulled together all the biggies, MySpace, LinkedIn, Ning, and its own Orkut – representing nearly 200 million users, four times that of Facebook – and as you probably know, named the consortium OpenSocial – Ad strategy still to be determined.

On of the smartest things Zuckerberg has done when he repositioned Facebook from a college-dorm service, was to open up its network to sofware developers, inviting them to write apps and share whaterver revenue they generated.  Google may quite possibly do the same, giving developers a one-up, by letting them write code that can run-anywhere the openSocial platform is supported – sharing similar data Facebook does.

It seems Facebook gets the early win, part market timing, part execution – as its being compared to a groundbreaking step toward associating word of mouth – the best medium ever – into the advertising space.  Another way of looking at it is “spamming your friends.”  Privacy is always the next point people make, so time will tell how this ultimately will unfold. Over time I assume the sheer quantity of these “feeds” will become diluted, much like the flashing banner ads we all currently ignore now.  Seems the key for now is to stay agnostic, try to establish a footprint in both environments until the dust settles.

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