Google vs. Facebook in the Battle of Affinity

Every month, people click the “Like” button on Facebook more than 80 billion times. They post more than 10 billion updates on Twitter, and they write tens of millions of products reviews on sites like Amazon and Yelp. And with every one of these social actions, people declare their affinities — their preference for or desire to connect with other people, products or things.

This rush to post affinities online recalls another flood of data that began a decade ago: The explosion in online search. John Battelle once described the data created by search engines as the “database of intentions” — a catalogue of people’s needs and desires collected by observing their search behaviors.

The idea behind the database of intentions is as simple as it is powerful: If you study what people are searching for, you can sell them what they want. Google in particular knows a lot about people’s intentions, and it has used this database of intentions to drive a lot of value for marketers. In fact, last year, Google made $50 billion, most of it by turning intention data into ad targeting.

Now here’s the big question: Don’t social sites like Facebook also know a lot about people? What if all the social actions people take add up to a “database of affinity” — a catalogue of people’s tastes and preferences collected by observing their social behaviors? And what if that database of affinity is worth as much to marketers as the database of intentions?

That sounds great in theory, but there’s an obvious problem: So far, social sites haven’t been able to turn affinity data into anything particularly useful. In fact, while Google was busy making $50 billion last year, Facebook made just $5 billion.

So why this disparity? Is Google ten times better at leveraging data than Facebook? Well, perhaps. But the biggest difference is that the affinity data Facebook is collecting is enormously different from the intention data Google has traditionally collected. Think about it: Intent is expressed before a purchase; it’s an indication of what we want. But affinity is typically expressed after a purchase; it’s an indication of how we feel about what we already have. For that reason, affinity data will never predict short-term purchases as well as intent data does. But affinities are based on emotions, and often remain steady for years. That means affinity data does have a valuable role to play in a different kind of marketing: It can power effective brand advertising rather than direct marketing.

Facebook and Google are both working hard to turn the database of affinity into something useful for marketers. And Facebook has a built-in advantage here: It’s by far the most dominant social site, so it holds perhaps the largest collection of affinity data online. But a closer examination shows that Facebook isn’t ready to help marketers use affinity data — and that Google is much more likely to win this race. Why?

• Google collects a wider range of affinity data. You probably think of Google as a company that mostly collects intent data — but it also collects a lot more affinity data than you realize. Some 800 million people use YouTube every month, nearly half a billion people share content with their friends on Gmail, and the Google search index captures almost every review, blog post and tweet online. And Google+ may be a disappointment, but more than 200 million people have posted affinity data there. This large, broad set of social data means that Google will be better able to triangulate people’s affinities than Facebook.
• Google is better at bringing meaning to data. After all, it’s the core of Google’s business: Evaluating enormous amounts of information to figure out what content people most want to see. And it doesn’t just do this on the search side of its business — its DoubleClick unit has been delivering relevant ads to online users for more than 15 years. Plus, Google already offers marketers tools for using performance data to optimize ad buys — exactly what’s needed to get the most value from the database of affinity.
• Google has the ad formats to build brand impact. In fact, Google offers some of the very best brand ad units online. For instance, YouTube’s pre-roll ads can reach hundreds of millions of people — with TV-like impact — and its homepage takeovers are among the most powerful online ad formats available. And though rich-media ads on the Google Display Network may not sound sexy, they’re far superior to the ad units marketers can buy on Facebook.

The bottom line: The database of affinity promises to bring the same discipline and success to brand advertising as the database of intentions brought to direct-response advertising. And it won’t be Facebook that realizes the enormous promise of social affinity data — it’ll be Google.

Nate Elliott is a vice president and principal analyst at Forrester Research. Follow him on Twitter @nate_elliott.