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How Facebook Could Be Stifling Google’s Growth

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For years, we’ve collectively recognized Google as the biggest name in the Internet. They’re responsible for refining—and some would say perfecting—the course of online search. Every year, they come out with new products and features that enhance and streamline online user experiences. Even their culture is impressive, rewarding their employees as well as their users with fun, seamless experiences.

Over the course of the past 15 years, Google has exponentially grown, but that momentum is now starting to wane. There are several factors responsible for the decline, as with any change in business, but one of the biggest factors might be coming from an unlikely contender—an indirect, but massive competitor in the social media world.

Google’s Slow Decline

articleimage664Google’s Slow Decline

Google is still the powerhouse to beat in the search world, but as an entire company, it’s starting to lose some momentum. They recently released a quarterly financial report, and despite still showing growth, there were significant points of concern for investors. They had expected to grow at a rate of 20 percent, but only grew at a rate of 17 percent.

Certainly, Google’s explosive growth couldn’t last forever. There is a finite number of potential users of the search engine, and Google has become so ubiquitous that there are simply fewer potential new users to go after.

While the financial report did not give any explicit reasoning behind the missed projects, it’s reasonable to assume that increased competition could have been a factor. After all, Bing and Yahoo! are starting to see increased popularity as online search options. But it’s Facebook, the social network powerhouse, that might be giving Google a run for its money.

Users and Content

articleimage664userandcontent

Already, people are starting to turn to sources other than search engines to get their content. Most users scroll down their Facebook news feed in order to catch up on the stories of the day, and most users log into Facebook on a daily basis. With 1.5 billion active profiles, Facebook is a force to be reckoned with, and Google will likely continue to see declining figures as more users rely on alternative sources to consume content and get information.

Facebook Advertising

articleimage664facebookadvertising

Facebook advertising may be the single biggest throttle to Google’s stream of revenue and growth potential. Since Google searches and most Google products are completely free to use, Google makes the majority of its substantial income through paid advertising, like the PPC ads you see at the top and side of your search bar. For years, businesses have paid top dollar to be featured in one of these slots and gain traction by attracting new clicks.

Today, those ads are harder to get. Visibility has increased, but so has the demand of companies trying to earn those coveted spaces. As a result, the cost of paid advertising with Google has skyrocketed, forcing small businesses to go running to a competitor.

While Bing has been trying its best to launch a cohesive and efficient paid ad engine, Facebook has won out as the most valuable alternatives for businesses. Through Facebook, businesses can spend as little as $5 a day for as long as they want, and narrow down the scope of their target audience based on age, sex, geographic location, and even personal interests—that’s far more specific functionality than Google offers with their keyword-based platform, and since many businesses are marketing through Facebook anyway, the integrated ad platform is capturing their revenue.

Facebook Atlas and User Knowledge

The trend of usage and practicality for Facebook advertising is only going to grow. For the past several months, Facebook has been teasing the announcement of Atlas, and the platform is now live. Atlas is described by Facebook as “people-based marketing,” a marketing and advertising solution for businesses who need something a little deeper and more effective than the Facebook ads of yesteryear.

Atlas is built on an entirely new base of code, and offers more integrated campaign management features. The usual audience targeting and cost management features are present, but with a more detailed metric reporting feature and tie-ins to offsite sales so businesses can accurately project the ROI in their campaigns.

But the greatest feature of Atlas, and the biggest threat to Google, is the inherent understanding of individual users that Facebook has accumulated over the years. Facebook has slowly and diligently been collecting incredibly detailed pieces of data on all its users, just waiting for the perfect opportunity to monetize it. Facebook knows much more about its users than Google does, and with Atlas, it is prepared to turn that advantage into cash.

Furthermore, Atlas is looking to become an ad-serving platform that extends all across the web, not operating the confines of any one platform, making it a direct competitor to Google and challenging Google’s own product, DoubleClick. Atlas is also ignoring cookies entirely, entering the fray with a new form of user tracking based on the unique URL of Facebook users’ profiles.

The bottom line here is that Facebook has a greater pool of knowledge than Google, and with Atlas, it might have greater functionality. It’s certainly a major player in the world of digital paid advertising now, and Google has a right to be concerned. In the coming years, don’t be surprised if Google PPC campaigns start to wane in price and significance as Atlas makes improvements and starts to leech more of Google’s revenue.

Looking to the Future

Google is still one of the biggest, most profitable companies in the world, and it isn’t going away anytime soon. Even if Facebook is radically successful with its latest product, and even if it continues to refine its strategies and grow, Google will still have the power and the authority to continue its pattern of growth. That growth might be limited, but it will still exist.

Over the course of the next several years, you can expect that Facebook’s Atlas will be followed up by a series of related products and services, taking advantage of Facebook’s ever-growing database of user information to bring in more revenue and attract more potential customers. Right now, Facebook is barely causing a dent in Google’s overall strategy, but after five or ten years of aggressive pushing, they could force Google into a direct competitive situation. What would happen as a result of such a showdown remains to be seen, but it’s likely that the two entities will learn from each other and continually try to one-up each other in an effort to achieve dominance.

What It Means for Marketers

Since Google isn’t dying, you don’t need to worry about the future health of your SEO or PPC campaign. However, it might be worth your time to invest some money in a new Facebook Atlas campaign and see how well the platform works for your business. As the platform grows, you’ll likely tap into some impressive new functionality, and your ad campaign will likely benefit.

The emergence of a new competitor to Google can only mean good things for the individual marketer. Increased competition means you’ll see better functionality rolled out at a faster pace, you’ll see prices drop in an effort to generate more revenue, and you’ll be in the middle, taking advantage of each platform to maximize your reach and impact.

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Samuel Edwards

In his 4+ years as a digital marketing specialist, Sam has learned the ins and outs of online marketing. Additionally, he has worked with countless local businesses as well as enterprise Fortune 500 companies and organizations including: NASDAQ OMX, eBay, Duncan Hines, Drew Barrymore, Washington, DC based law firm Price Benowitz LLP, and human rights organization Amnesty International. Today he continues to work with and establish SEO, PPC and SEM campaigns.

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