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Facebook, Twitter To Vie For Mobile Ads 02/08/2012


Facebook, Twitter To Vie For Mobile Ads

by Mark Walsh, Yesterday,

Facebook’s IPO filing has focused much attention on its lack of mobile advertising to date, despite the social network boasting a mobile audience of 425 million — almost half its total user base. The company flagged the absence of mobile advertising so far — and its unproven ability to monetize its mobile inventory — among the risk factors in its offering.

As Facebook now scrambles to launch its mobile ad business before going public this spring, Twitter could find itself under similar scrutiny if it decides to follow suit a year from now. More than half of its traffic comes from mobile, and that proportion is likely to grow as smartphones continue to proliferate.

By the nature of its 140-character limit, Twitter has always been more naturally suited to mobile than Facebook. With the rollout of ad formats like Promoted Tweets and Promoted Trends, the company has bet on sponsored, in-stream posts that translate more easily to the mobile screen than standard banners.

Still, Twitter isn’t much further ahead of Facebook when it comes to mobile advertising. “Twitter’s advertising on mobile to date has been largely experimental,” noted Jed Williams, an analyst at BIA/Kelsey. “In fact, it just rolled ads into mobile apps for the first time late last year. Much like Facebook, it’s in a nascent stage of monetization.”

Twitter’s ad business overall is in a more nascent stage than Facebook’s, with paid advertising on the site having been introduced less than two years ago. Facebook reported ad revenue of about $3.2 billion last year. While Twitter doesn’t yet publicly disclose financial figures, eMarketer estimates its 2011 ad revenue at $150 million.

But the unexploited mobile landscape provides something of an even playing field for Twitter to compete with Facebook. “In one sense, it is better positioned than Facebook to succeed with mobile advertising. Users will be accustomed to promoted tweets and the units will essentially be the same in a mobile context,” said Greg Sterling, senior analyst at Opus Research.

If recent reports are accurate, Facebook aims to ensure a smooth transition to mobile advertising by offering its own in-stream ad unit. The Financial Times reported Facebook is pitching agencies on “featured stories,” or promotions that run in mobile users’ news feeds. The company suggested as much in its IPO filing, floating the possibility of including “sponsored stories in users’ mobile News Feeds.”

But Facebook had only begun to run sponsored stories — which typically appear on the right side of the page — within desktop users’ news feeds last month. It hasn’t had much time to acclimate users to the new ad placement on the traditional Web before launching it in mobile. User backlashes to changes on Facebook are common.

For its part, Twitter in December debuted upgraded versions of its apps for the iPhone, and Android and Windows Phone devices as part of its broader redesign. That opened the door to advertising within its apps and a more brand-friendly mobile presence for marketers.

Since Twitter acts like a real-time, location-aware news wire, mobile ads on the service can be targeted to reach the right audience at just the right time, according to BIA/Kelsey’s Williams. “In particular, you can imagine Twitter operating effectively in deals and flash sales,” he said.

Twitter’s deep integration with iOS 5 should also help the company accelerate its mobile audience growth. Consider that Apple sold a record 37 million iPhones and 15 million iPads in the last quarter of 2011. As it is, Facebook’s mobile audience of 425 million is still larger than Twitter’s more than 300 million users overall.

“I’m surprised Twitter has taken its time [rolling out mobile ads], but Facebook surprises me even more,” said David Berkowitz, vice president, emerging media, at digital agency 360i. “Has there ever been a media property with more than 400 million consumers that hasn’t been monetized?”

via MediaPost Publications Facebook, Twitter To Vie For Mobile Ads 02/08/2012.

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About Bob Innes

Who am I and what I do best! I am a skilled Sales and Marketing team player known for performing behind the scenes miracles that increase base distribution, improve customer relationship management, exceed annual sales volume,and profitability for Consumer Packaged Goods companies. And I've been doing it for over 15 years. My successful contributions include such clients as Kraft Foods, Mars, Bumble Bee Foods, Unilever, Johnson and Johnson and SC Johnson, and JM Smuckers.

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