Facebook's display ad sales strategy is growing revenue much faster than Google's. This reflects a superior ability to harness the trove of data both companies have on their users by Facebook. It also gives us insight into the future of customized advertising, and the implications of scale when it comes to online marketing.
Facebook and Google use two different strategies, respectively named cloning and customer match. Cloning is the process by which the demographics of people that have already bought an advertiser's product are "cloned" or used to identify a very similar person to target ads towards. Customer match which has been largely pushed as a result of cloning's success does something similar, but inferior. Advertisers upload email lists of their customers. Google finds logged in users with similar demographics, which it then targets ads towards across all of its platforms (Google, YouTube, etc.).
The growth rates are not equivalent. Facebook's cloning is driving much more revenue growth than Google currently. This elucidates a longstanding question of what type of data will be more helpful in actually selling products or services. The two companies collect slightly different types of data, and it seems the personal nature of Facebook's is currently more valuable. Given Google's own attempt at creating a social network through Google+, this is not a surprise. However, considering that people use google as their primary search tool for commercial transactions and Facebook does not directly collect specific purchasing intent, this might be slightly counter-intuitive.
More broadly, these are the two players in this market because they are better equipped to harvest the data troves they have. It is unlikely that without this scale of information collection that another competitor can play a large role any time soon.
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