Facebook vs Twitter: Which is a better option for advertisements?

Social media sites often add and improve their paid ads platforms offering advertisers to choose how and where they want to advertise. Facebook and Twitter the are senior class of social networks with a large user base, outranking various other sites with almost similar functionalities. It is for this reason that marketers look for strong message through their ads on these two most popular social websites. Now, often this leads to a dilemma for marketers of choosing which of the two. 

I. Introduction

• Ads displayed on Facebook or Twitter platforms serve similar purpose, seek to achieve similar goals and function almost in a similar way
• But, by using both as a medium may end up targeting many of the same users, just on different platforms with double the expenditure.
• It is here that marketers look for a concrete answer: Which is better for me: Facebook ad or Twitter ad and why? 

II. Overview of the Revenue Models

A. Twitter Revenue Model

Model 1:

• The most important model for Twitter to generate money is through its onsite advertising which comprises 85% of its revenue share. 
• It includes promotion of a tweet, promotion of a full account or promotion of a trend.
• Mobile devices account a whopping 65% of the this advertising revenue.

Model 2:

• One another way Twitter uses to attract advertisers is through data licensing.
• twitter sells the ‘firehose’ or its public data (from its 500 million tweets per day) to large companies.
• Google and Microsoft Bing also pay to twitter to license firehose so that they can include those tweets in their real time search results. 

B. Facebook Revenue Model

Model 1: Advertisement: 85% share in Revenue

Model 2: Other Sources: 12% share in Revenue

Model 3: Recent Innovations

III. Facebook vs Twitter: A comparative evaluation

A. Users

• Facebook has almost 5 times as many users and 10 times as daily shares as Twitter.

B. Ad Performance

C. Mobile Ad Performance

• Mobile devices are the future of effective marketing and tapping this resource is ideal for the advertisers.
• Facebook holds 15.8% of mobile ad market share as compared to twitter holding 1.85%.
• Facebook earns 41% of total ad revenue from mobile in contrast to twitter who earns 50% of ad revenue from mobile ad.

IV. Observations from the Analysis

A. Facebook

• Greater Reach than twitter as it has bigger user base.
• Growth rate of monthly active users is greater for Facebook.
• Advertisement on Facebook is economical  as compared to twitter.
• Has bigger portfolio of types of advertisement.

B. Twitter

• Click through rate of twitter is higher than Facebook.
• YoY growth rate of RPV for twitter is 300% as compared to 29% for Facebook.
• Growth of social share for twitter has increase by 258% as compared to 20% for Facebook.
• Good for conversion on branded products.
  

V. The Final Verdict

• Based on the research and various literature review on viewers' perception for the two sites, a following conclusion can be derived.

• Facebook ads are the advertising platform to go with. It has a better chance of getting ad money.
• Facebook is looking good to attract advertisers with established brands: mostly apparel, sports items etc. It has seen around 275% increase in click though rates and almost 40% decrease in the cost per click.
• Some specific areas are largely dominated by Twitter (see table above). They are very good in brand building and conversion for high involvement products.

VI. Reasons for Facebook's dominance

• Facebook’s Ad Manager App allows building ad campaigns from smart-phone application, but Twitter’s only shows updates and trends about your ads.
• Targeting a particular set of audience is tougher in case of Twitter as users only share name, username and phone number while creating a Twitter account.
• Advertising cost for promoting trends costs $200,000 currently which is not affordable by most businesses.

VII. The Way Forward

A. Facebook

• It needs to work on ad fatigue or blindness for users, as they can identify the difference between ads and posts easily in a glance.
• They should make shorter options for ads affordable as currently only long ads campaigns (>1 week) are preferred due to cost factors (lesser CPC). 
• They can also have something like verified ads where the offers, discounts and promotions advertised can be verified and notified to users by a tick mark. 
• They can charge users a premium to not display any ads for a certain duration of time (monthly/yearly) which is also a source of revenue through ads.

B. Twitter

• It needs to promote the TV targeting which is about promoting tweets to people engaged with specific TV shows in a real-time environment that is unique to Twitter. 
• Many other revenue models on lines of Facebook can bring a great share of advertisers' money to the website.

VIII. Conclusion:

• Facebook wins the battle on many fronts to attract advertisers’ money with Twitter not far behind.
• other sites like Google+, LinkedIn and Instagram are getting into the business quite rapidly to get a larger share of the pie.
• The war for advertisers’ money is going to be played in a much more innovative way.
• The uniqueness of a particular website that brings in more users and with them comes advertisers.
• It is important to be innovative, be competitive but most importantly be what users feel you are!