Google wants everyone, to click everything, over-and-over, all the time…… that’s okay if advertising expenses are outperforming the wildest expectations. However, without a deep understanding of who is clicking your ads and why, you’ll fail.
How do Google and Facebook make money?
Well Senator, advertising, of course.
Google and Facebook make money by advertising, period. Advertising revenue is by far the single most lucrative income stream for both platforms.
Google puts your business in front of customers, that’s it. Google wants you to sell as many “things” as possible, because that means Google users found what they were looking for after clicking on your ads. If users find what they want, either online or at your business, they’ll come back the next time they’re in the market.
The downside, is that Google doesn’t care if you spend $10 to make $1. It’s your job to put the right product, in the right place, at the right time. It’s no different from paying the rent at your retail space or corner store. You still have to pay the rent and utilities, regardless of how many people walk into your store, regardless of whether you made any money.
Google Wants You to Make Money
Google wants you to make money on your advertising campaigns because if you don’t make money, you’re not going to advertise on google anymore.
On the other hand, Google also wants you to make money because that means people are buying things. If people are buying, they are finding what they are wanting. When people find a place that has what they want, they’ll come back for more.
If users arrive on a Google search results page and see ads irrelevant to what they want, ads become a nuisance to finding what they want, instead of an enabler. They’ll not only be annoyed, but they also are not going to click spammy, irrelevant ads. When Google users don’t click ads, Google doesn’t make money.
The Difference Between Google Ads and Facebook Advertising
There are two basic advertising models which run most of the internet’s advertising, “impression-based” (Facebook, Twitter) and pay-per-click (Google, Bing).
For now we’ll just stick to these basic strategies, as they are the most important when assessing the costs of online advertising. While most platforms continually develop more advanced bidding methods, here are the differences between how you’ll evaluate how you’ll spend money on Facebook and Google advertising platforms.
Facebook Advertising: How Much Will I Pay?
Pay per Impression: On Facebook advertising, you’ll pay for how many people SEE your ad, but will not pay extra money for each click. It’s essentially a flat rate, fixed dollar bidding strategy.
Facebook charges for advertising based on the number of users who viewed your ad.
Facebook Advertising Cost Structure (Impression Based Advertising)
For example, if 1000 people on Facebook SEE my ad, and 10 people click, my ad cost is not different than if all 1000 people clicked. Instead of paying for each click, you’ll pay the market price for each ad view based upon how competitive your market is.
Advantages of Advertising on Facebook
The more competitive your market is, the more you’ll pay for each impression. This strategy has advantages when ad space is undervalued, or when your ads are far more compelling than your competitors. If you’re willing to pay for more impressions, you’re effectively gaining market share over your competitors.
Facebook Serves Ads to Billions of Users Each Day
There’s only a limited amount of eyeballs on the internet, so if a Facebook user is viewing your ad, it means they’re not viewing your competitors ad.
Facebook Advertising is Easy
Facebook advertising is easy. Put in your credit card and off you go whether you want to promote your local business or boost a post with a service you offer or item you’re selling.
Downsides to Facebook Advertising
When the barrier to entry is low, the competition is steep. On Facebook, you’ll see ad budgets which range between enterprise and fortune level companies, to mom and pop shops, and global brands. That means you’re ads better be well targeted, and they better be relevant, or nobody has time for you in a sea awash with alternatives.
Impression Based Advertising – How to Measure CPM – Cost Per Mile (CPM)
Impression based advertising strategies like those used on Twitter and Facebook ads are measured with a metric called CPM bidding, which means “cost per mile”. Statistically, your CPM is how much you paid for 1000 clicks.
Frankly, I try to avoid throwing around acronyms; it’s easy to get confused. But when you’re looking for digital marketing and advertising strategies online, it’s important to know that when “CPM” or “impression share” are involved, you’re paying for how many people SEE your ad, not how many people click.
How Does Google Advertising Work? PPC Advertising Strategy
Every major search engine offers a pay-per-click advertising plan. It’s quite simple, you only get charged when your ad gets clicked. Even if millions of people see your ad, you won’t be charged other than when people click. Google and Bing, which make up the overwhelming number of online searches each day both serve ads under this ad cost model.
How Much Does Google Advertising Cost?
The most reliable advertising strategy on Google is called pay-per-click (PPC). Yes, it’s that simple; if people click on your ad you’ll be charged for each one of the clicks. Unlike Facebook, you won’t be charged for people that view your ads and do not click on them.
How Much Does Each Click Cost?
The cost of each Google click is based on a “silent bidding” auction. You’ll decide how much money you’re willing to pay for each click (Max Bid), and if your bid is higher than your competitors, your ad will be shown on top theirs. If your ad shows first on the page, we call this the first position bid.
Because each search results page only has a max of 3 – 4 ads at most, the lowest bids will not be shown on the page.
The trick: is finding the least competitive ad clicks for the most valuable customers.
Google Ad Budgets
Pay-per-click models don’t mean that you pay an unlimited amount of money if more people happen to click your ad. Every advertising campaign is capped by daily or monthly budget cap. So that means you’ll control how much much money is spent per month without worrying about blowing your budget out of your wallet
Highest and Lowest Possible Ad Click Price on Google
The lowest possible ad click on Google Ads is $0.05 cents. The most expensive and competitive markets may cost upwards of $100 per click. For example, if you’re selling $60 million dollar mega yachts, $100 clicks for a relatively small number of possible customers is just a drop in the bucket.
What is the advantage of Google advertising over Facebook?
The advantage of Google advertising..is that you’re only paying for people who walk into your digital store, meaning they click on your ad and come to your website. If nobody clicks your ads, you wont pay a dime, not even a penny. It’s that simple.
