The battle between relative children by age rages on. Mark Zuckerberg has announced his desire for Facebook to compete directly with Google as a search engine, while Google is experimenting with allowing advertisers to target search ads based on demographic and interest data. So who will win the battle for internet supremacy?
Last year, Facebook launched its first attempt to get into the search market with Graph Search. In essence, Graph Search shows search results based on the interests and activities of a user’s friends . For example, you can search for photo, game, movie, and restaurant suggestions based on your friends’ likes. This ambitious attempt to jump into the ring and square off with Google has proved to be more of a challenge than Facebook may have initially realized. According to an interview last month with BusinessWeek, Mark Zuckerberg confessed that saying Graph Search worked half the time would be generous.
That said, Zuckerberg isn’t discouraged with the search market. In fact, at his 2013 fourth quarter earnings call, he made it clear that competing in this space was a top priority. Zuckerberg also defended the progress they have made with Graph Search stating that, “(T)he first release [of Graph Search] indexed more than a trillion connections between all the people and interests and events and groups and things that everyone was connected to. … (A) trillion pieces of content is more than the index in any web search engine.” Exaggerated or not, this claim shows the potential Facebook has to develop a search engine that truly understands the complex relationships between people and their interrelated content. While this news is very exciting and has huge implications, according to Zuckerberg they expect it to take 10 years to get it where they want it to be. Considering that these companies have only existed for a combined 25 years, 10 years in this industry can seem like an eternity.
While the arrival of the perfected Facebook search engine may not be imminent, it is important to clarify why the thought of a Facebook search engine likely scares Google. Google has been trying since the introduction of Google+ to integrate personalized social results with classic search. Despite Google’s best efforts, Google+ has yet to gain the type of dedicated following Facebook has. This poses a unique opportunity for Facebook to do exactly what Google has been trying to do with Google+: a truly personalized search engine experience that directly integrates the interests of you and your friends into your organic search results. In addition, if Facebook is successful in creating a functioning and effective search engine, they could also dramatically increase their ad revenue. As advertisers gained the ability to show demographically- and interest-targeted ads to searchers outside of Facebook, they would likely spend more and more as they had more chances to reach potential customers.
One advantage that Facebook has had over Google is its access to extensive accurate user demographic and interest data. The ability to target a prototypical customer who has expressed interest in your industry or field has at times made Facebook a more efficient way to spend marketing dollars to target potential customers.
To try and combat this competitive advantage, Google has had general targeting based on this information for display ads for the last several years. This demographic and interest data is estimated based on a user’s search history, as well any other Google account history. In addition, to expand on the targeting abilities, Google is currently beta testing expanded demographic and interest targeting for search ads. While it’s hard to say how accurate their profiling of users is currently (check what Google thinks you are here), it is safe to say that it should only improve in accuracy over time as it acquires more and more user information. Once this feature goes mainstream and is generally considered reliable, it poses a real threat to Facebook advertising. A marketer that is using Facebook ads for the demographic and interest targeting capabilities might be inclined to switch the majority of their budget over to Google AdWords if they could use the similar targeting capabilities in addition to keyword search. Google is also expanding their affinity segments, which equate to interest categories, for expanded targeting capabilities on display and (eventually) search. Because it would marginalize their competitive advantage, Google’s efforts to provide demographic and interest targeting poses a huge threat to Facebook.
Let loose in our free market economy, it seems that competition has driven Google and Facebook to try and outdo one another at their own game. While it could easily be a decade before these services are fully effective and widely adopted by both users and marketers, they pose significant opportunities and threats for both Google and Facebook. For the moment, however, it seems that both companies are thriving in the fields they know best, and have the dedicated followings and systems to be in a position to succeed for years to come. So if you are still wondering who wins the battle for internet supremacy, it seems to me the answer is clear. An improved experience for both users and advertisers on both platforms that come about as a result of these two behemoths battling head to head means that we are all the true winners.