Last year, Facebook generated over $3 billion from display advertising. That’s impressive, but what’s unfortunate about this is that all of it came from te site’s desktop platform, while mobile contributed nothing. As Facebook continues to struggle in its efforts to monetize its mobile presence, one of its biggest social rivals appears to cleaning up in the same area.
According to Dick Costolo, CEO of Twitter, on some days, the company’s mobile ads are outperforming their desktop counterparts. Facebook would love to know the secret because it has been having a difficult time profiting in this arena to say the least. Costolo mentioned at a recent conference that it has to do with Twitter being a mobile platform by nature. Although the microblogging originally started out on the conventional web, its mobile presence quickly grew to be the preferred method of connecting. It’s been a similar story with ads, as they were initially distributed on desktops before recently arriving on smartphones.
Mobile Exclusive Strategy
Facebook is hoping that it will soon be reporting a similar success story. The company is now offering a mobile-only version of Sponsored Stories, an advertising product that lets marketers promote status updates posted by friends as sponsored content. This is a huge move for the both the social giant and brands because previously, advertisers had no say over where their ads appeared. In fact, every since mobile has been an option, they have been forced to run ads on both it and the desktop platform.
On the heels of a controversial and disappointing IPO, it is no secret that Facebook is under tremendous pressure to improve its business model. The obvious place to start is mobile, where the social giant already has a huge advantage. There are currently more than 900 million Facebook users, and nearly 500 million of them are plugging in to the platform through mobile devices. We all know Twitter is generating a high level of engagement on the mobile front, and this is likely the reason it is seeing so much success in the ad department. Facebook is seeing that engagement as well, but with the new mobile-only ads, its challenge will be incorporating sponsored content without suddenly interrupting the user experience.
A Model of Excellence?
Back in January, eMarketer estimated that Twitter is on pace to make $260 million in revenue this year, and $540 million by 2014. This is a far cry away from what Facebook is making with desktop ads, but impressive nonetheless. What Twitter may be able to offer its rival is a model of how to properly monetize the mobile platform. The company has steadily been rolling out new ad products, and it looks like the response has been good.