Google Inc. (GOOG) Strikes A Deal With Facebook Inc. (FB) For Ad Revenue: Negotiations Preferred Over Battleground Invite [REPORT]

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Search engine giant Google Inc. (NASDAQ:GOOG) and Social media titan Facebook Inc. (NASDAQ:FB), in spite of being fierce competitors on social media front, have joined hands in advertising section to dominate the Digital Advertising industry. The 2 web giants have struck a deal by which Google’s DoubleClick Bid Manager will allow its clients to buy inventory on FBX, Facebook Ad Exchange.

Google Likely To Be Trigger-man In The Deal

The deal might have surprised many as Facebook is likely to get slightly more benefited than Google in terms of revenue, as DoubleClick would be simply directing its advertisers to FBX platform and major share of monetary benefits rests with Facebook. Facebook is probably looking to increase its advertising revenue by this deal and boast about its dominance over advertising sector, and encircle more advertisers into its client list. On the other hand, Google is playing smart by striking the deal as a measure to keep DoubleClick’s client list happy and encourage long-term association with them. Google has been frontier in making announcement of this deal and its benefits to advertisers; claims the reason for the move as betterment of services to its clients. But actual reason is quite visible as they foresee major problems upfront and are looking for negotiation and not battling social media favorites out.

Google Facebook tie up

Until now, DoubleClick allowed advertisers to buy ads on various advertising exchange except Facebook, because of which majority of advertisers had to explore elsewhere for fulfilling their media buying needs. For services, like those of DoubleClick, it requires a massive amount of inventory; tie up with Facebook will definitely enhance its advertising inventory and encourage long-term association with its existing clients. DoubleClick will be largely benefited by this deal in terms of driving more clients and be a one-stop-shop center for advertisers, whereas monetary wise Facebook would gain major share.

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Facebook’s massive user-base attracts majority of advertisers across the world and its recent developments have helped them in enhancing their Ad performance in consecutive quarters. Although Google owns bigger share of advertising revenue, it foresees a challenge from Social media giants as most of the advertisers getting accustomed/ attracted more towards advertising on Facebook. Currently, Facebook is marketer’s first choice, as a result of continuous innovations and addition of new features in last few years. When Facebook had earlier launched FBX – an ad exchange platform to let advertisers buy cookie-based re-targeted ads on its site – it welcomed a crowd of ad-tech companies (Except Google) to its real-time bidding party. Google Plus (343 Million) is still not in race when it comes to social media front when compared to Facebook (1.15 Billion users), although former is striving hard to encourage marketers to adopt Google Plus for advertising purposes, Facebook’s innovations have successfully outplayed them.

Amidst the war between the 2 online giants for gaining higher revenue, marketers are more benefited in terms of wide options to buy ads and more outreach due to large user base of Facebook. Advertising world will be totally dominated by Google and Facebook in future as the DoubleClick-FBX deal progress further.

2 COMMENTS

  1. I think its a good move as both the companies have understood that its inevitable to avoid each other by by playing in the same field. Google, however, may take the bigger pie of upcoming advantge but on a longer run, I see, Facebook will feel the absense of its Ad server similar to DoubleClick.
    Its high time when Fb need to up the ante and try to lauch the Ad server it acquired from Microsoft some time back – before its too late.

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