▷ Google and Facebook business models

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

Before I start my little analysis of Google and Facebook’s revenue strategies I would like to clarify that I do not take sides for either of these 2 actors. I admire them both as much as the others, especially for their successes and for the opportunities they offer the world of the internet. When I talk about opportunities, it’s not just about the commercial aspect, I think few internet users could do without these services! ;).

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Google’s business model

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

Just about everyone revenue generated by Google comes from their advertising platform: Google AdWords. Google AdWords has become one of the most powerful business handles for many businesses. It’s very rare not to hear about AdWords when talking about 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 (should be avoided if possible …).

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

google adwords revenue generation

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 need to use their services to become more and more dependent on them and therefore at the same time accumulate more and more data, which will later be possible to reintegrate for advertisers on AdWords. It is precisely at this point that we can remove the big phrases like “Google addiction”, “Google the new Big Brother”, “Google is everywhere” … Well, that’s not the subject of this article!

As for Google Plus, which is currently growing rapidly and which is still (to my taste) being used too little by businesses and Internet users. The quality of this social network and the user experience offered by Google through Google+ are elements that I find indisputable. The whole platform is fluid, the mobile applications are very intuitive, there are no ads … I am also a G + user and I am not disappointed. However, I still think the comparison with Facebook is “cruel”, after all, Facebook does not have its own AdWords! Also, let’s take a closer look at his case …

Facebook’s business model.

Facebook consolidates all its activity on one platform who is … Facebook! This is where Facebook needs to find the means to Make money on your audience, its database. Facebook’s core strategy has shifted to a completely free service model and therefore forces it to look for sources of revenue generation of its audience on its platform. There are not millions of solutions, advertising remains (I think) the most appropriate solution for this type of business. What should you do when you have a website where more than a billion internet users exchange? It is simply one gold mine for advertisers !

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

Facebook is why depending on advertising and user behavior. This dependency can sometimes be dangerous, just look at the latest numbers regarding network users consulting it on the mobile. For (too) a long time, Facebook did not know it monetize this mobile audience which is taking an ever-increasing share … Fortunately, some “classic” ad formats have now been adapted for mobile, which has also enabled Facebook to register a good growth of + 38% in one year in the first quarter of 2013, of which 30% was made on mobile (source: Newsroom FB).

Revenue generation for Facebook ads

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

Imagine if Facebook had adopted a business model focusing on the Freemium model, do you really think the success would have been the same? It almost certainly is not. That free online is one of the necessary elements 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, when you are Community Manager and you are trying to unite a community (for free) on Facebook, the various announcements of new advertising formats and the ever-increasing emphasis on this advertising are “disturbing”. But after all, do you know a tool in the world that offers as many quality tools and the same audience as Facebook on a voluntary basis? I do not think so, otherwise Facebook would have already gone bankrupt! We can of course mention Google+, but at the moment the 2 target groups are unfortunately not comparable …

What to keep in mind from this business model difference between Google and Facebook?

It should primarily be remembered that Facebook’s revenue generation strategy is legitimate, Mark Zuckerberg chose this solution to maintain the free service for users. Some will say that the famous “Facebook is free and will remain so forever” is no longer really relevant, especially due to the decline in the reach of publications, the highlighting of advertising offers rather than naturalness … But I think That this vision is valid only on the professional side, and more specifically for the Community Managers who manage the company’s fan pages. Users have very little chance of being concerned at this level, even though an initiative to promote posts for individuals was launched some time ago …

Google, for its part, should continue to develop Google Plus gradually to gather all the information of Internet users in one place. Google+ would therefore be destined to become the backbone of Google, and it is of course difficult to imagine that ads will appear on it (at least in the short / medium term). I take the opportunity to end 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”.

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