Week 13: Clear

Hunt versus Hike -

The differences in Facebook’s & Google’s ad models

 

Have you ever heard of hunter and gather? Probably yes.

But have you also heard of the hunt versus the hike? No, it does not have to do with any leisure activity or hobby. It is about the different ways users or costumers are using websites. Moreover this difference has a great influence on the ad models and in turn on the revenue models of Facebook and Google.

 

Graphic 1&2: Hunt vs. Hike

  

People using search engines like Google are on a hunt.

A hunt is described as “a task-oriented search to collect information that will drive a specific action”. Users want to get specific information to learn something, they want to get questions answered, they are searching for a solution to a problem or are just looking for something they want to buy. Google and other search engines makes use of the fact that the hunt might overlap with ads. So if you are for example searching for a trip to Europe, Google will show advertisements of travel-related companies like hotels, rental cars, travel providers, or if you want to look for a nice dress, Google will show advertisement of online shops offering dresses and other clothes. The advertisement is kind of targeted to the search terms you use. Hence, you are on a hunt and Google provides potential prey.

 

A hike refers to the activity when you have a vague or rough idea what you will encounter. However, you are not looking for something specific but you rather want to have a look around or explore. Facebook is one website which offers a great opportunity and possibility to go on a hike. You just click on a news feed of a friend, which brings you to photos of a recent party, on which people are tagged. You click on the tag of a nice guy you met and explore his Facebook profile. Then you see his favorite music artists and you click on the group page of a singer. This page is linked to a music festival you explore. As you think your close friend might be interested you share this public event with her and so forth. When being on a hike you kind of walk from one thing to the next without a specific planned route.

 

Google’s revenue model is based on the concept that it charges text advertisers if and only if customers click on their advertisements. Without any clicks, the firm advertises for free. Hence, with respect to ROI (return on investment) it is very efficient. Google users tend to click on advertisement ca 2% of the time.

Facebook also tried to leverage on offering space for online advertisement. It charges companies CPM, so each time when the advertisement was shown to a customer, Facebook charged the advertisers, and the payment rate was calculated per 1000 impressions. However, Facebook achieved only a click-through rate of 0.04% and it pulled its banner ads in in early 2010.

Graphic 1 by Florian Prischl on Wikimedia.org:

http://commons.wikimedia.org/wiki/File:Hiking_boots_on_sand.jpg

Graphic 2 by Fantagu on Wikimedia.org:

http://upload.wikimedia.org/wikipedia/commons/4/49/Modern_Hunting_Rifle.jpg