Mobile advertising grew substantially during 2015, and will likely be the driving force in ad growth in the future. It seems that Facebook’s efforts have paid off, while Twitter appears to be experiencing growing pains, despite increased revenues. So let’s examine what each network is doing differently in the ad space.
Facebook claimed 80 percent of the $5.6 billion generated by ads during the fourth quarter of 2015 were generated by mobile. And that’s no surprise given that 90 percent of Facebook users access the site at some point through mobile and tablet devices.
Facebook COO Sheryl Sandberg said on a conference call with analysts:
Heading into 2016, it’s clear that consumers have shifted to mobile, and businesses know they need to catch up.
Businesses are well aware of the potential of mobile advertising and pouring resources into mobile campaigns. Facebook is likely seeing these huge revenues because of its dominant position in the mobile market.
Twitter has not been faring so well lately, with the recent executive exodus, and apparent challenges in its efforts to increase user growth. The latest endeavor Twitter is hoping will be a saving grace: a campaign to show users fewer ads.
According to Re/code, Twitter is showing fewer ads (or zero ads in some cases) to prominent users who generate a high volume of Tweets or reach a significant number of followers. Considering the value Twitter provides by hosting content, content creators who reach the most people aren’t valuable as ad impressions but as creators and influencers.
This approach seems wise given that Twitter doesn’t have nearly the user density of Facebook, so every quality Tweet counts when it comes to keeping the user base engaged. Re/code senior editor Peter Kafka notes that if Twitter is taking this path it may as well offer subscriptions that remove ads for all users. This strategy seems to be working for YouTube.
Facebook is a juggernaut, so it’s unsurprising that the company is making billions in ad revenue. Twitter on the other hand is a comparatively small service that needs to provide a greater value for users. And there’s something to be said for advertising models that benefit users.