Facebook "Push" marketing vs Adwords "pull" marketing : Impact on ad bid prices

The differences between a Facebook marketing campaign, and SEM (Search Engine Marketing aka Google Adwords marketing) have discussed adequately in several places in the web. I want to bring out an insight on the impact of a key difference (the facebook ad push vs google ad pull) on your ad cpc/cpm pricing. I assume that the reader has basic knowledge about how Google Adwords and Facebook Advertising works.

The search engine "pull" use case (for Google Adwords) is simple - the user searches for a query, and google matches the ads where search query == bid phrase. The position of your ad is determined by your max-bids.In Google, the competing bids for your keywords are from businesses similar to yours; you bid for keywords and the cost of the keywords naturally depends upon other bidders, who happen to be related to your own business. For example, if you bid for the keyword -" modular homes California - your price depends on other bidders who bid for similar keywords; now, who will bid for such keywords? Naturally, your direct competitors, and other players who manufacture peripheral products, accessories, or who offer repairs and services for modular homes, and the like. So, the spectrum of bidders will comprise of bidders who have business related to modular/manufactured homes that are likely to be energy efficient, and easy to transport etc.


In Facebook advertising, however, we have the "push" use case - you target your ads to a particular demographic, who are also most likely the target of several other products/services/business that all have different margins, and marketing budgets. For example, you can choose the target demographics - users who are between 30 & 50 years old, living in California, who have "liked" anything related to homes. ( we could keep adding more likes such as "liked" sustainable living products etc) Now, this target demographic is same for tens of other businesses, for example, insurance companies selling home insurance. And, naturally, the margins, and marketing budgets for each of these businesses will be different, and may be far higher than your products. They will bid more for the target demographic.So if your value per click(or per thousand views) is $10, you could be out bidded by another business who is bidding for the same demographic, and whose value per click(or per thousand views) is say $50. So the Avg CPC or CPM could be much higher in Facebook.


In a situation where ad inventory == supply of pageviews, you are fine. Facebook will achieve its target displays for all ads in the inventory. This is more likely when your parameters for target demographic is broad based, and facebook can display your ads to anyone. your ROI in this case may be less than ideal. The more targeted you want your ad demograhic, the lesser is the audience, and more is the competition, and you may be competing with deep pocket business, whereas in google, you were competing with similar businesses. This one aspect may push up the max bid value. Also, consider that FB can show only 5 ads per page, whereas in Google there are about 10 spots. This intensifies the competition in FB, and pushes up the bid prices. In one of the ad campaigns I ran (in both Google Adwords and Facebook Advertising) for a home manufacturing company, Facebook consistently suggested a higher bid price of $2+ for our ads but our Google Adwords campaign managed an avg cpc of $1.31(it is another matter that we bid over $3 but google wouldnt push up the ad to 1st spot due to low quality score. I dont think Facebook has such an algorithm). 


But that said, Facebook leads are not likely to convert in first visit, and a direct ROI comparison with Google cannot be normally done. Generally, the Facebook campaigns are primarily for generating brand/product awareness. A more thorough ROI analysis can be done if only we can track the first source of leadgen for conversions in your site. If you use google analytics, you can set the parameter "utm_nooverride=1" in your landing page url. This will attribute the conversion to very first source of lead, and thus you can track a conversion that first came to your site using Facebook, (brand awareness), and say later converted in the 3rd or 4th visit. But a more accurate ROI will be after analyzing the conversions over a period of 3-4 months(depending upon the purchase cycle of your products), as FB leads will likely convert in later visits.

Comments