▷ Google and Facebook business models

Google and Facebook are often compared, put on the same scale with one point of comparison being Google Plus in particular. I think it’s important to clearly distinguish between these 2 web giants that have Business models completely different. At the same time, it will allow us to answer questions like: why is Facebook starting to impose its ads? Why is there no advertising on Google+? Why has Facebook changed so much in 1 year?

Before I get to my little analysis of the Google and Facebook monetization strategies I want to make it clear that I am not taking sides with any of these 2 actors. I admire them both as much as the other, especially for their successes and for the opportunities they bring to the world of the web. When I talk about opportunities, it’s not just about the commercial aspect, I think few internet users could do without these services! †

The Google business model

Google has a service panel very wide range of solutions for millions of internet users and companies around the world. What is special about these services? They are almost all free † Exception made recently with the release of a premium version of Google Analytics… But are most of the services offered by Google offered “with a good heart” to Internet users? Is Google a non-profit organization? Not far from there I assure you!

Only almost all revenue generated by Google come from his advertising platform: Google AdWords† Google AdWords has become one of the most powerful business levers for many businesses. It’s rare that you don’t hear from AdWords when it comes to traffic, SEO and web marketing strategy† There are also many advertisers who have even become “AdWords dependent” on this network, which can represent a very large part of their revenue (to be avoided if possible…).

Google AdWords is simply the best thing that has happened to Google as this service serves both Google through revenue and advertisers seeking visibility. The fact that ads are served based on user requests provides contextuality very interesting. It is also (very) rare that this company is questioned, after all, it also allows Internet users to obtain more “qualified” and more “personalized” results.

monetization google adwords

Google’s goal is therefore not to monetize each of its services, rather it is on an axis of customer loyalty† For Google, internet users have to use its services to become more and more dependent on them and thus at the same time collect more and more data that can later be reintegrated into AdWords for advertisers. It is precisely at this moment that we can get rid of the big phrases like “Google addiction”, “Google the new Big Brother”, “Google is everywhere” … Well, that is not the subject of this article!

As for Google Plus, which is currently experiencing strong growth and which (in my opinion) is still underused by companies and internet users. The quality of this social network and the user experience that Google offers through Google+ are elements that I think are indisputable. The whole platform is fluid, the mobile applications are very intuitive, there are no ads… I am a G+ user and I am not disappointed. Yet I continue to find the comparison with Facebook “cruel”, after all, Facebook does not have its own AdWords! Besides, let’s take a closer look at his case…

The Facebook business model.

Facebook is consolidating all its activities on a platform who is… Facebook! This is where Facebook needs to find the resources to monetize your audience, its database. Facebook’s core strategy has shifted to a completely free service model, thus forcing it to look for sources of income of its audience on its platform. There are no millions of solutions, advertising remains (I think) the most suitable solution for this kind of business. What to do if you have a site where more than a billion internet users exchange? It’s just a gold mine for advertisers

Since the beginning of advertising, the aim of advertisers has been to reach an audience, preferably qualitatively. In the case of Facebook, the audience is huge, there are audiences for all genres and therefore for almost all advertisers. And you know what ? No need to search, Facebook has already segmented all user information to allow configuration of micro-targeted advertising campaigns in a few clicks.

Facebook is therefore dependent on advertising and the behavior of its users. This dependency can be dangerous at times, just look at the latest numbers on network users accessing it on mobile. Facebook didn’t know (too) long monetize this mobile audience which is taking an increasing share… Fortunately, some “classic” ad formats have now been adapted to mobile, allowing Facebook to also record a good year-on-year growth of +38% in the first quarter of 2013, of which 30% was made on mobile (source: Newsroom FB).

Monetize Facebook Ads

But now, since Facebook’s IPO, this monetization strategy has accelerated… Why? Therefore Facebook is first and foremost a business, and now a company that has to satisfy investors. I think a lot of people forget this aspect and discredit Facebook’s strategy too directly.

Imagine if Facebook would have adopted a business model centered on the Freemium model, do you really think the success would have been the same? It’s almost certainly not. The free on the web is one of the elements necessary for success, internet users are getting more and more used to it and in my opinion are not ready to get rid of it!

So yes, if you’re a Community Manager and you’re trying to unite a community on Facebook (for free), the various announcements of new ad formats and the increasing emphasis on these ads are “disturbing”. But after all, do you know of any tool in the world that voluntarily offers as many quality tools and the same audience as Facebook? I don’t think so, otherwise Facebook would have gone bankrupt already! We can of course mention Google+, but for the time being the 2 target groups are unfortunately not comparable…

What to remember about this difference in business model between Google and Facebook?

In particular, it should be borne in mind that the Facebook monetization strategy is legit, Mark Zuckerberg chose this solution to keep the free service for users. Some will say that the famous “Facebook is free and will always be” is no longer really relevant, mainly because of the declining reach of publications, the emphasis on promotional offers rather than naturalness… But I think this is vision only valid on the professional side, and more specifically for the Community Managers who manage the corporate fan pages. Users are unlikely to be concerned at this level, even though an initiative was launched some time ago to promote posts for individuals…

Google, in turn, should continue to gradually develop Google Plus to bring all the information of internet users together in one place. So Google+ would be destined to become the backbone of Google, and of course it’s hard to imagine ads appearing on it (at least in the short/medium term). I take this opportunity to close with the idea of ​​a comment that a user left me on Google +: “unlike Facebook, Google Plus is not a social network. It is a social environment that integrates all Google services” .

Leave a Comment