Twitter vs. Facebook

Twitter’s initial public offering (IPO) is on the horizon, and the company just raised its price range, which suggests they’re feeling confident about the results. However, investors might not be as optimistic. According to polls, only 35% of Americans believe purchasing Twitter stock is a wise investment, a stark contrast to the 51% who were positive about Facebook stock before its IPO in May of last year. Personally, I’m not planning to buy any Twitter stock. I’ve consistently stated that Facebook underperforms in ad performance for direct response marketing (lead generation), particularly when compared to similar options from Google. But how does Facebook stack up against Twitter in this regard? The truth is, while Facebook ads have seen considerable improvements since their IPO last year, Twitter still requires significant development as an advertising platform. To determine the effectiveness of Twitter ads and how they compare to Facebook’s offerings, I delved into some data. I assessed both social networks across four key categories:

• Network Reach – Which platform commands a larger audience?
• Ad Performance – Can Facebook and Twitter ads deliver tangible results?
• Mobile Ad Performance – Which social network dominates the mobile landscape?
• Ad Formats – Which platform provides a wider variety and higher effectiveness in ad types? My findings revealed that Facebook, while performing adequately, isn’t exceptional in any of these areas. A recent open letter to Mark Zuckerberg from a Forrester analyst supports this observation, highlighting that Facebook ranks last in a satisfaction index of digital marketing channels. Despite this, Facebook surpasses Twitter in crucial metrics like Revenue per Visitor. Let’s delve deeper into the data. RELATED: 45 Facebook Advertising Tips

Twitter Vs. Facebook: Network Reach

Facebook receives top marks for network reach, boasting 1.15 billion active users who generate 4.75 billion shared items daily. Twitter’s reach, while decent, pales in comparison with 232 million active users producing 500 million tweets per day.

According to the Wall Street Journal, this limited audience size might not be sufficient for some advertisers. This disparity in reach likely explains why Twitter only captures 13% of social media advertising budgets, while Facebook commands a significantly larger share at 57%.

Twitter Vs. Facebook: Ad Performance

Conducting a precise comparison of ad performance between Twitter and Facebook is challenging due to Twitter’s limited disclosure of metrics. However, based on available information:

AdWeek reports “engagement rates” for Twitter ads can reach up to 1-3%, significantly surpassing Facebook’s average click-through rate (CTR) of 0.119%. Twitter benefits from its in-stream ad placement, unlike Facebook’s side-rail approach. Conversely, the average cost per thousand impressions (CPM) is substantially higher on Twitter, reaching up to $3.50 compared to Facebook’s average CPM of $0.59. Furthermore, Twitter doesn’t publicly share its return on investment (ROI) statistics, while Facebook boasts a 109% ROI. One comparable metric is revenue per visitor (RPV): Facebook generates $0.93 while Twitter lags behind at $0.44. While Facebook’s RPV is double that of Twitter’s, it’s worth noting that Twitter’s RPV has experienced a remarkable 300% year-over-year growth, compared to Facebook’s 39% YoY improvement. (Facebook also leads in first-click revenue per visitor, with $1.63 compared to Twitter’s $0.82.) Furthermore, while Facebook’s share of social referral visits has decreased by 20% YoY to 62%, Twitter’s share, though smaller at 6.8%, is rapidly expanding, experiencing a 258% year-over-year growth. Additional points to consider:

• Twitter asserts that Promoted Trends can increase brand conversion by 22%, positive mentions by 30%, and retweets by 32%. However, these promoted trends can be costly, exceeding $200,000 per day, a 33% increase from their 2012 price.
• The effectiveness of Facebook ad marketing varies significantly across different industries. For instance, the average cost per click (CPC) for alcohol brand ads is 45% higher than the average. In contrast, gaming ads boast a 30% higher CTR and a 40% lower CPC compared to the average. (PDF)
• An AdAge survey ranked five online advertising platforms based on their ROI. Google secured the top position, followed by Facebook, with Twitter trailing behind. In my assessment, Twitter still has much to prove, perhaps even more so than Facebook.

Twitter Vs. Facebook: Mobile Ad Performance

Twitter might have an edge in this domain. On smaller mobile screens, well-designed and seamlessly integrated ads are paramount. Since Twitter ads are embedded within the timeline rather than relegated to the side, they’re better positioned to capture attention on mobile devices. Conversely, Facebook ads are confined to the right rail, a feature absent in the Facebook mobile app. Consequently, Facebook falls short in catering to its mobile advertisers. Furthermore, the Facebook app only offers one native ad format: the App Promotion Ad. In contrast, all Twitter ad formats are displayed consistently on both desktop and mobile platforms.

Let’s examine the mobile performance metrics of these two platforms:

While Facebook currently maintains a leading position in the mobile market share, expect big growth from Twitter in this area. Projections indicate that by 2015, Twitter will generate $1.33 billion in global ad revenue, with mobile ads contributing to over 60% of this figure.

Twitter Vs. Facebook: Ad Formats

In June, Facebook Facebook cut its ad format options in half, responding to user feedback requesting simplification and the removal of redundant features. The current Facebook ad formats include:

• App ads
• Domain ads
• Mobile app ads
• Offer ads
• Page-like ads
• Page post link ads
• Page post photo ads
• Page post text ads
• Page post video ads
• Sponsored stories Robert Hof at Forbes suggests that “advertisers no longer need to navigate 27 ad formats when planning their campaigns. Instead, they can focus on their objective – be it gaining followers, driving app installations, or increasing foot traffic to physical stores – and Facebook’s ad system will recommend the most suitable ad types.” My interpretation is a bit more skeptical. Essentially, Facebook conceded that over half of their ad formats were ineffective. This is generally not a positive indicator. Twitter, on the other hand, offers a much more streamlined selection of ad formats:
• Promoted tweets
• Promoted accounts
• Promoted trends I anticipate Twitter will expand its ad format options in the coming year. Historically, Twitter has been slower than companies like Google in introducing new features. (Although, the recent shift to include images in timelines suggests an attempt to increase ad engagement.) A common consensus exists that both Twitter and Facebook fall short in terms of tracking, measurement, and analytics capabilities.

Conclusion: No Clear Winners

To summarize: Neither Twitter nor Facebook presents an optimal advertising solution for direct response marketing (lead generation). Social media platforms inherently lack the intent-driven nature of search engines. They are better suited for large-scale brand advertising and fostering engagement with fans through content marketing (soft sells rather than direct e-commerce). While Facebook holds an advantage over Twitter for such marketing endeavors, the reality remains that neither platform is remarkably effective, and both have considerable room for improvement in their paid advertising offerings. Drawing inspiration from Google AdWords and the Google Display Network might be a step in the right direction.