From a high level, Google’s advertising business is built on top of two primary data assets – the explicit search queries that its users type into its search engine and cookies of users that it leverages to target non-search advertising (e.g, display ads). However, when comparing Google with Facebook as an Advertiser, the obvious questions that comes to ones mind are – Isn’t Facebook’s still relatively new people-based targeting approach superior to Google’s predominantly cookie based approach? And, as a result, won’t Google lose share – both in eCPMs and in use of its adtech – to Facebook over time? Given that Google has been innovating in its ad platform for longer and advertisers have been optimizing their campaigns for longer, doesn’t Facebook have more upside relative to Google from innovating and optimizing its ad campaign targeting and measurement platform capabilities?
What Digital Marketing Agencies have to Say ?
In this people vs. cookie debate, data points from ad campaigns and third parties suggest that the people-based approach does out-perform cookie-based approaches. Facebook’s Atlas has presented data that cookie-based campaigns overstated the audience reach by 26%, understated frequency by 41%, and overstated conversions by 21%. This makes sense as identity- or profile-based targeting does a more accurate job of targeting people rather than devices, as people-based models tend to allow for greater audience segmentation, and as cookie-based profiles are at greater risk of deletion and data leakage.
In attempting to consider what is at stake for Google in the event Facebook is able to leverage its people-based data and platform, Google is not sitting idle and has the assets and potential to respond to and address these new opportunities in ad targeting, and the transition, if any, by advertiser and agency customers is likely to be a relatively longer process than what we’re accustomed to with typical Internet ad spend as these customers have spent a lot of money and time standardizing on Google stack for many years.