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A Comparison – Google & Facebook Ads Auction Platform

Google Ads has been around for years since 2000 to be exact. Many businesses and brands have used the platform since then to drive traffic to their online and offline properties, generate leads for their business, and convert their prospects. Facebook Ads, on the other hand, has not been around as long as the Google ad platform has – 2007 – but has seen comparative success among advertisers wishing to achieve the same results just spoken of.

Google Ads vs. Facebook Ads (Auction)

Many brands, digital marketers, and advertisers who have used both platforms have said that the learning curve for Google Ads is much quicker than for Facebook Ads. One of the main reasons cited is the understanding of how each ad platform runs its bidding auctions.

Google Ad Auction & Facebook Ad Auction

Google uses a Generalized-Second-Price auction (GsP) where each advertiser submits their bid for a specific item and the highest bid wins as compared with Facebook which uses a Vicky-Clarke-Groves auction (VCG) where advertisers submit their bids for multiple items without knowing any of the other bids posted by the other advertisers inducing them to bid what they believe to be the “real” or “fair” value of an item or group of items.

Bid

Google’s bidding system is relatively simple and straightforward as it allows bidders to measure each individual keywords’ worth through the platform’s keyword planner tool and therefore mostly choose to set a manual bid which they can control as they measure the effectiveness of that keyword during their campaign.

Facebook’s bidding system is not so straight-forward as there are no specific items like keywords in which to target and measure. Instead, advertisers bid on actions such as likes, visits, and shares, whose worth cannot be ascertained so easily. This is why many advertisers choose to use the auto bidding feature on Facebook Ads and let the platform decide how high or low to bid for each action or set of actions.

Ad Quality

In order to measure how relevant an advertiser’s ad copy (title and description) is in relation to their chosen keywords, Google uses a measure called Quality Score. This score is heavily weighted by an ad’s Click-Through-Rate (CTR), or how many times the ad is clicked in relation to the number of impressions it receives. The higher the CTR, the better the Quality Score and the lower the bid for a particular keyword goes.

Facebook uses a relevance score as well, but it is not as clear as the Quality Score Google uses. Again, the metrics in which Facebook comes up with its relevance score for a particular ad is ambiguous at best. The only hint Facebook has given as to how they measure an ad’s relevancy is according to the feedback of those who view the ad. In other words, if viewers are engaging with an ad (clicks, likes, shares, comments), it should receive a higher relevance score and if they are not engaging with it, a lower relevance score.

Effective Measurement: Conversions & Action Rate

The ultimate measure of any paid campaign lies in its conversion rate – did the ad get viewers to do what you wanted them to do. An advertiser can measure this in Google Adwords through conversion tracking, which can be done through the platform itself or through a third-party tracking service. Either way, whether an advertiser is hitting their conversion goals (visitors, leads, sales, etc…) or not their ads will continue to show on the platform as long as they continue to pay money for them to be shown.

The Action Rate Facebook uses, on the other hand, is a completely different mechanism than that of conversion rate. It is the third factor Facebook employs (Bid, Relevancy, Action Rate) to determine a final auction price – Google only uses two (Bid & Quality Score). The Action Rate is determined by the “action” that was chosen for a specific campaign such as clicks, video views, post engagements (likes, comments, shares), conversions and downloads (apps). Once an action is chosen, Facebook will automatically target an audience it feels will best meet the specific objective (a.k.a. action).

Conclusion

Both ad platforms can be used by various businesses and advertisers to meet the desired goal. There are over 3.5 billion searches performed each day on Google and approximately 35 million people who update their status on Facebook daily, so there is no lack of traffic on either platform.  While both ad platforms do have different auction-bidding methodologies, both advertisers and businesses can find success with either platform if they use proper tracking methods that measure major conversion metrics like Cost-Per-Acquisition (CPA), Click-Through-Rate (CTR), and Earnings-Per-Click (EPA) and optimize each campaign based on these.

A comparison of Google and Facebook ads auction platformCourtesy of: Icecube Marketing

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