Facebook vs AdWords: What’s Right for Your Business?

If you’ve been in PPC advertising for a while, you probably remember the good old days when you could get AdWords (now Google Ads) clicks for pennies.

The traffic was good, the cost was good. For early adopters, AdWords changed the way they did business.

good-old-days

Unfortunately, all good things must come to an end. Over the past 10 years, the average cost-per-click on AdWords has skyrocketed.

Today, AdWords can make you a lot of money, but it’s also a great way to lose a ton of money.

know-youre-in-the-good-old-days

It’s sad, but true.

However, AdWords isn’t the only viable PPC option these days. If you’re looking to do PPC advertising now, you’ve got a lot of options.

Facebook, Twitter, LinkedIn, AdWords…which channel(s) should you invest in?

Of all the available options, most companies start with the two 1,000-pound gorillas in the PPC space (and I don’t blame them)—AdWords and Facebook.

AdWords vs Facebook – the Two PPC Gorillas in the Room | Disruptive Advertising

But which one is right for your business? Where should you put your budget?

Don’t worry, I’ll make the decision easy for you. In this article, we’ll look at exactly why certain businesses flourish or fail on these platforms and give you the information to decide where to put your time and money.

Sound good? Let’s start with B2B businesses.

B2B Marketing

In B2B marketing, your product is typically more niche, so it works best to target lower funnel traffic that is searching for your software or service. So, for most B2B companies, AdWords is your best bet.

But what about your cost per click (CPC)?

Yes, B2B search terms often have high CPCs, but your customer lifetime value (LTV) is also usually quite high. For example, you might pay $10-20 per click, but if a sale is worth $10,000, that’s a CPC you can handle.


Bonus: How to Make AdWords Work for B2B Marketing


LinkedIn Ads could also be a beneficial acquisition channel, but this Battle Royale is between Google and Facebook.  

All that being said, Facebook has recently entered the B2B domain by letting you create audiences based on Job Title, Company Size, Industry, Seniority, Job Role, Employers and Office Type.

As an added perk, you can even create lead ads, which autopopulate the Facebook user’s contact information in the form and allow you to add 3 additional fields to further qualify the lead for your sales team.

lead-ad

For certain companies, these features make Facebook ads a good fit for their B2B advertising efforts, especially for companies that are interested in generating top-of-funnel leads.

So, even if you put the majority of your budget towards AdWords, it’s probably still a good idea to test out Facebook.

In general, however, the quality of B2B traffic and leads you get through Facebook tends to be lower than what you get through AdWords.

Your CPC might be $1.00, but if you’re driving the wrong traffic, you’re not actually saving any money.

Retargeting

Regardless of how much advertising you do on Facebook or Google for your B2B business, you should always retarget on both Facebook and Google.

No matter the channel, you’ve already invested a significant amount of money to generate traffic to your website. Why not continue to stay top of mind during the sales process through retargeting?

For both platforms, it’s usually best to use a variety of ads to minimize ad fatigue. However, with Facebook in particular, it’s a good idea to use a range of ad types—video, carousel and single image ads—to ensure that your ads stay fresh and interesting.

Facebook vs AdWords

As a general rule of thumb, for your average B2B company, the Facebook vs AdWords debate is fairly straightforward. 

Start by investing 90% of your paid budget into Google Adwords and 10% of my budget into Facebook Ads. From there, let the cost per lead and ultimately cost per sale data decide on what that ratio is.

You never know, Facebook just might surprise you!

B2C Marketing

For B2B businesses, AdWords is the clear winner. B2C, however, is Facebook’s domain.

Why? The cost-per-click.

Unlike B2B marketing, where your LTV can easily absorb a relatively high CPC, business-to-consumer (B2C) advertising is much more cost sensitive.

For our average B2C client, the cost-per-click is around $0.90, although this can range from $0.05-3.00. In contrast, these clients pay around $8.00 for clicks on AdWords.

Guess what?

good-old-days-are-back

If you’re a B2C business, advertising on Facebook is like going back to the good old days on Google when clicks cost mere pennies.

Now, Facebook traffic is typically higher-funnel-traffic than AdWords traffic, so your Facebook conversion rate is often lower than your AdWords conversion rate.

However, because the CPC is so much lower on Facebook, your cost-per-conversion is still lower with Facebook than you see on Adwords.

For example, say you have an 8% conversion rate on AdWords and a 3% conversion rate on Facebook:

  • If you’re paying $8 per click on AdWords, each AdWords conversion costs you $100.
  • If you’re paying $0.70 per click on Facebook, each Facebook conversion costs you $23.33.

Which option looks better to you?

Where Facebook May Not Be the Best Option

Although Facebook is a great fit for most B2C businesses, there are times when AdWords is a better choice.

Niche Products

Niche products can be difficult to make work on Facebook because Facebook marketing is only as good as the data you give Facebook.

For niche products, your target market is fairly limited, no matter where in the funnel you are trying to advertise.

Case in point…

Nice Product Marketing... | Disruptive Advertising

Even if you target your ads well and get a lot of clicks on your see-through toilet, you won’t get many conversions, which means that Facebook’s algorithm won’t have much data to work with.

Since who sees your ads is heavily reliant on Facebook’s algorithm, the smaller your target audience, the harder it will be to get quality traffic and conversions from Facebook ads.

Facebook definitely isn’t a bad channel for niche products, but we’ve consistently found that Adwords often produces a higher initial ROI.

Expensive Products

In general, Facebook clicks and conversions tend to be more of an impulsive decision. People aren’t searching for your product, but they see your ad and decide they want what you’re selling.

That works great if you are selling $45 fashion purses. New cars? Not so much. (although my midlife crisis car, Audi RS6 Avant, below is quite sexy…wagons for life)

2016-Audi-RS6-Avant-Performance-HD-Wallpapers-1080p2

Sure, this car might be exactly what they will end up buying, but not many people will see a picture like this on Facebook, head to the website and make a purchase.

But, if someone is searching for “buy new Audi RS6 Avant” on Google, they’ve probably thought about the price and are ready to buy.

If your product costs over $500, you may have a hard time getting people to buy with Facebook Ads. They might click, but most people need to think seriously about a purchase of that magnitude.

Let the Data Guide You

Regardless of what their offer is or who they are selling to, smart marketers make their decisions based on data.

For example, let’s say you have a $30,000 monthly ad budget. Your Facebook ads are producing a 3x initial return-on-investment (ROI) and Adwords is producing an 8x ROI.

Logically, you’re going to invest more money into Google.

But let’s say you’ve captured over 95% of your AdWords Search Impression Share for your keywords with $25,000 of your ad spend.

Suddenly, Facebook advertising looks a lot more attractive.

Sure, your ROI might be lower with Facebook, but advertising on Facebook will allow you to use that extra $5,000 to both drive additional revenue to your business and build brand awareness that will translate into additional search volume for your AdWords ads.

On the other hand, maybe your initial ROI from AdWords is 8x and your initial Facebook ROI is 3x, but what about your total customer LTV?

If customers from Facebook have 2x the LTV of your AdWords customers, it might be a good idea to put most of your budget into Facebook.

Conclusion

So, Facebook vs AdWords, which is right for your business?

Obviously, there are a lot of factors that go into determining which pay-per-click platform is right for your business, however, if you’re looking for a place to start, consider the following:

  • B2B Businesses: Start with AdWords and retarget on both Facebook and the AdWords Display Network. Consider testing Facebook for your business using 10-20% of your monthly ad budget.
  • B2C Businesses: Start with Facebook, unless you have a product with a small market niche or one that costs over $500, in which case you should start with AdWords. Consider using 10-20% of your ad budget to test on your non-primary market.

If you’d like me to take a look at your business or your current marketing efforts and help you decide if Facebook or AdWords deserve more of your attention, let me know here or in the comments.

Finally, thanks for reading the whole article! Feel free to tweet “gorilla marketing” at me (@SaunderSchroed) and I’ll make sure to give you a RT to my solid 400 followers (each of my 400 followers have the power of 20 Twitter Users…you do the math).

Do you agree with this take? How do you decide where to put your marketing budget? Are you a bigger fan of Facebook or AdWords ads?

The following two tabs change content below.

Saunder Schroeder

Chief Product Officer
Saunder is passionate about growing brands through digital marketing, and has done so for Fortune 500 to startup companies. He’s a legend in his own mind, and is obsessed with his family (wife + baby girl), football and sweet potato fries.

29 Comments

  • Tim says:

    Great article and great insights into PPC. Looking forward to reading about your ideas on PPC assisting SEO if you’re up for another article challenge.

  • Regina says:

    Hi, love the info. Thank you. Would love for you to take a look at my marketing strategy

  • James Lane says:

    There’s perhaps a slight over simplification of persona versus keyword PPC models, but I do agree with the general outcome. For many smaller businesses, which is who I tend to speak to most, the CPC is a strong driving factor – even more so than your breakdown for overall costs (which is awesome).

    • Saunder Schroeder says:

      Hey James—it’s definitely meant as a generalization, but I do think the rules will tend to lead businesses in the right direction. I also agree that CPC is very important for small business or new accounts (there’s often a correlation between the two), because that’s generally the only metric you can measure the success of the campaign on. Appreciate your insights!

  • Raj says:

    I am agree with this article

  • Selwa says:

    Personally, I prefer the targeting options that you get with Facebook vs. Google, but I guess it depends on the business. You should go wherever your audience is spending most of their time. Each ad platform has its own method of reaching users, so it’s important to learn the ins and outs of both and use them both in the way they’re meant to be used.

  • What a great read! Thank you for sharing this. What is your take on advertising services vs products? For example, with financial services, do you think people could be reacting differently seeing the ads on Facebook vs AdWords?

    • Saunder Schroeder says:

      Hey Ksenia—for B2C services and products, Facebook tends to drive higher volume, where AdWords offer a much more consistent volume; ultimately, I’d test and see which channel provides the highest ROAS and/or volume. We have clients in the financial sector using both AdWords and Facebook.

  • Toby says:

    I currently work in the higher education sector. Have you had any experience in the Adwords/social split in that area? Both platforms seem to have their benefits but for a product with such a lengthy decision making process, Facebook seems to be more of a brand awareness tool more than anything – a first touchpoint of sorts. Still trying to figure that right budget split (of course not factoring in other channels in this context)

    • Saunder Schroeder says:

      Hey Toby—you’re definitely right. Paid Social is generally a Middle to Top of the funnel traffic source, which is exactly why we focus on a full-funnel paid social strategy. We have many clients in the higher education sector; on average, our higher education clients spend 85-90% of their budget on paid search—AdWords and Bing—because it offers a more consistent cost per lead and lead volume source. We’ve found Facebook is the best paid social channel for higher education, so the remaining 10-15% is spent on FB.

      We’re more than happy to discuss this more.

  • Great article, very readable with helpful advice! I would love to have you look over my marketing – we have a very niche product, with B2C brand and B2B brand, so any advice will be wonderful.

    • Saunder Schroeder says:

      Thanks Louise! We’d love to learn more about your brand and goals. One of our account strategists will reach out shortly!

  • Great info. I was considering facebook pay per click but you’ve pointed me toward adwords as my product is for a b2c niche market and costs considerable more than $500. Very helpful article . Thankyou

    • Rakesh says:

      Good concise info. Though the choice of platform depends on a lot of other factors like competition in the market, whether your brand or business is already known or not etc but the b2b b2c concept, pricing of the product concept, niche product, allocation of budget in a certain ratio are all really important factors to decide between platforms. However, the best way to know is to test by allocating a part of your budget to various platforms as people get surprised by the results very often.

  • Marjie says:

    Hey! I work for a dealer group and handle their Facebook advertising, and in fact canceled the Google Adwords! We have a WAY higher conversion on Facebook – and sell cars from boost post to lead ads! Facebook has been a fantastic marketing strategy for us, where Google Adwords wasn’t. We were ultimately competing with our own manufacture. So we made the choice to let them pay for Google Adwords, and put our time and money into Facebook.

    • Saunder Schroeder says:

      Thanks for sharing Marjie! We’ve also seen a lot of success in the automotive space through Facebook Advertising. I love that you’ve seen success as well!

  • Bonnie says:

    I’m a real state agent in a growing town which is over saturated with realtors. Would face book be better for me because I have a small budget?

    • Saunder Schroeder says:

      Hey Bonnie! In your case I would recommend Facebook Advertising. You can geo target your city and surrounding areas, as well as target people who are looking to purchase a home.

  • Steve says:

    Great article, we are in the commercial office furniture B2B business. Primarily targeting Archetechs and interior designers. With this type of targeting would you still recommend the majority of budget on Adwords? We are also thinking LinkedIn? Thoughts?

    • Saunder Schroeder says:

      Hey Steve! I would probably focus most of your budget on Adwords and then a small percentage of your budget towards retargeting on Facebook. If you’re seeing Architects/Interior Designers become leads from your retargeting ads on Facebook, then you’ll know you have a good audience on Facebook and to invest more there. I don’t think LinkedIn would be a good advertising network based on your customers. One network I would definitely be advertising on is Houzz—there are a lot of architects and interior designers sharing their designs on Houzz.

  • Ken says:

    My business marketing goal is lead gen as opposed to actual sales. Measured on traffic to my site and inquiries. I need them to land on home page or physically to my front door. Retirement home business … very emotional sale … already do ad words however about invest substantial into social with FB being our main.
    Any further thoughts?

    • Saunder Schroeder says:

      Sounds like Facebook Advertising would be a great channel to test out, especially if you’re seeing success with Adwords. Also, since you’ve had success on Adwords you have a good goal to test against. Sounds like you’re targeting an older audience, which Facebook tends to do extremely well with. I’d love to learn more about your KPI’s and goals, and provide further feedback. Feel free to email me saunder@disruptiveadvertising.com

  • Thank you for the article. I own a eco conscious swimwear company based in Maui and have focused on FB advertising for the past 2 months but am looking to delve into Adwords as FB has not lead to many sales. I am a newer company with a growing niche market within the swimwear industry. Do you think it is too early to delve into Adwords? Or shall I go for it because of specific search words ” swimwear bikini eco sustainable ethical” etc? Thank you!

    • Saunder Schroeder says:

      Niche products like this can be very challenging to be profitable on the initial purchase, but typically the customer is extremely loyal and leads to a much higher LTV—they also tend to refer your products to their friends or circle. Being a young company, your running LTV might be nonexistent, so that’s where we like to focus on break even points and email acquisition to use in email marketing. I would definitely recommend starting with Adwords, as niche products do tend to perform much better. Once you have a decent amount of purchases happening on your website and a good customer list then Facebook Advertising starts making more sense. If you’d like to talk more, feel free to email me at saunder@disruptiveadvertising.com.

  • Sam Gill says:

    I read this article thinking that I could learn what Adwords is (are) and to see if it would help me. But I didn’t understand some of it. I own a Brick and Mortar Yarn Store. (www.theyarnstop.com) I use FB advertising to target events and classes to get customers to come into the store. We sell class registration online bt do not sell product online as there are several “big boys” in the playground that I cannot compete with – besides you need to pet the yarn before you buy it.

    In your opinion, am I using the best format?

  • I’m in the firearms training business. My classes are tailored for both beginners and advanced shooters. Being in Florida, the concealed carry license class is everywhere–at at prices that range from $50 to $75 for a 3 to 4 hour class, and cheapest in the country. My advanced classes appeal to a much smaller segment and range from $400 to $600 for 3 days of training. From speaking with other trainers, most rely on Facebook. Am currently undertaking a revamp of my website, so I have designed a splash page for these courses. Any suggestions?

  • I have a gite holidayg complex in Burgundy, France. Having looked at advertising on Facebook I can’t see a category listed that fits targeting holidaymakers. Can you advise? Many thanks

  • jerrysmith says:

    Best article and great insights into PPC service. Thank’s for this article!

Leave a Comment

Get More From Your Marketing Budget.




Free Consultation