Google vs Facebook and CPM Advertising Battle II

Google is "the" search platform and Facebook is "the" social media platform. Both companies run an advertising business model. But how will they evolve? Let 's have a look at this question from the advertiser's point of view.

When a medium starts to have a huge audience, every single advertiser wants to be there. Even if results are not measurable or they are not good enough. That is what is happening with Facebook. But when the medium becomes more sophisticated because of the huge amount of traffic they get, advertisers need to deliver good ROI through their advertising campaigns because they do not have enough money to be visible now in that medium, and their presence has to rely on results. And I believe this is the tipping point that Facebook is facing. This is the turning point that online newspapers did not survive and the reason why they are suffering the impact of the digital era in their online advertising business models.

Google has done the job and they are now trying to conquer the audicence, but the cash cow is working to capacity. They can make a good number of mistakes launching new products as part as their evolution. No problem with that. They have done the most difficult thing: being "the" search company with the best internet advertising platform. And they will be here to solve our search problems for a while.

So the question is, will Facebook be able to make the transition from "I want to be seen there" to "I need to sell there"? If the Facebook advertising platform is able to deliver good conversion results to advertisers, then Facebook will be like Google in less than 5 years. But if Facebook fails to make this transition, they will remain the accesory to every big advertising campaign. They will not be top of mind for the long tail advertising market; that is, all the small businesses looking for advertising ROI in the digital era.

Nowadays we can conclude that Facebook has to be in every branding campaign on a CPM basis, but the name of the game is to be a must in every ecommerce campaign on a conversion basis. Facebook will need to manage, from an editorial point of view, how to insert advertising in their online properties giving results to advertisers and maintaning a good user experience a top priority. This equilibrium is hard to find and has plenty of risks, or do you think that Facebook is not doing $20 billion in revenue every year because they do not want to?

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