If you have even a passing knowledge of the online advertising space, you’re aware of the fact that Google Adsense has been the dominant player in the industry over the past ten years. If you’re reading this article, you’ve certainly seen plenty of online ads displayed through the Adsense platform – even if you weren’t aware of it.
Prior to the emergence of Adsense, internet publishers struggled to monetize their content. Advertisers usually bought advertising by the thousand impressions, usually paying pennies – or in the best cases – dollars – to reach a publisher’s audience. Adsense changed the game by using smart targeting technology to display ads that were relevant to the content of the webpage and the user.
By combining an algorithm that analyzed the content of a page with tracking data that monitored a user’s browsing habits, Adsense was able to drastically increase the revenues for publishers. This targeting technology also meant a significantly higher return on investment for Advertisers who purchased Adsense ads.
Many companies have attempted to take on Google Adsense over the years, and while some of them have managed to carve out successful niches for themselves, all of them have failed to take a significant chunk out of Google Adsense’s market share. In the last quarter of 2011, Google’s Adsense revenues alone totaled nearly 3 billion dollars.
Facebook has dominated the social networking space for the last 7 years, but ever since they announced their intention to go public, it’s been clear that Facebook has been looking to expand beyond social networking and take on other areas of technology. In recent months, the speculation has been growing that Facebook is looking to launch their own ad network to compete with Google Adsense.
Why Is Facebook Ready To Take On This Market?
Facebook already has a well established Pay-Per-Click advertising network on their popular social networking site. Virtually every major content publisher also has a Facebook “Like” button on their website. Facebook has one of the largest – if not the largest – demographics database on internet users, thanks to their nearly 1 billion users and targetted ad platform. All these factors give Facebook a legitimate chance to successfully enter an arena that has been dominated by Google for the last 10 years.
For Facebook, entering the ad space on 3rd party websites is not just an attractive option, it’s a necessity. Facebook has already grown its social networking site to include nearly half of all world internet users. In order to significantly grow their revenues, they’ll have to expand into new areas. While Facebook generated nearly 4 billion dollars in revenue last year – largely through ads on their social networking site – that still pales in comparison to the earnings of Google’s Adsense product.
Can Facebook Succeed?
Can Facebook actually take a significant chunk out of a market that Google has dominated for years? Google certainly failed when they tried to move into Facebook’s area of expertise with their Google+ product.
But Facebook has direct relationships with millions of advertisers, millions of webmasters, nearly a billion users, a comprehensive database of user targeting data, and some of the brightest minds in the advertising and tech space. On paper at least, this gives Facebook all the tools to establish themselves in a market that has been dominated by Google for the past decade. As to whether they’ll actually succeed, only time will tell.