The latest report on mobile revenue from online marketing research firm eMarketer won’t console Facebook investors, at least not until next year. According to its report, Twitter will beat Facebook in mobile ad revenues through this year.
EMarketer estimates that Twitter will earn $129.7 million in mobile advertising revenues this year, while Facebook will earn just $72.7 million.
Strategizing an effective mobile business model is becoming increasingly imperative for companies, as the volume of mobile phones on the market skyrocket alongside the number of mobile devices owned by households. By 2015, tablet sales are estimated to reach 248.6 million units and smartphone sales are expected to reach 1.048 billion units, according to Transparency Market Research.
Twitter has already found its footing in mobile advertising. Dick Costolo, Twitter CEO, boasts that Twitter was developed with mobile in mind. As the company began selling mobile ads earlier this year, just weeks into its mobile ad program, the company garnered more ad revenue from its Promoted Tweets program on its mobile platform than on its desktop app.
Likewise, Facebook’s mobile ads have seen higher click-through rates than its desktop application. From a study conducted by SocialCode, the click-through rate for Facebook mobile ads was found to be 0.79 percent, while desktop, News Feed-based ads garnered just 0.327 percent of click-throughs. With a click-through rate on mobile over two times higher than on its desktop app, Facebook charges higher CPMs for mobile, which on average is $7.51.
Facebook has been slower to capitalize on its mobile strategy compared to Twitter, with even Facebook CEO Mark Zuckerberg attmitting that mobile is Facebook’s toughest challenge yet. Unlike Twitter, Facebook was designed for the desktop, and as we already know, translating a desktop app into a mobile app requires dramatic structural changes to compensate for the different screen size. Adding to the complication, a study by Trademob found that up to 40 percent of clicks on mobile ads have been found to be accidental clicks, in part due to the small screen size of mobile devices in comparison to the width of your fingers.
Fortunately, according to eMarketer, Facebook is forecasted to surpass Twitter in mobile advertising revenue by next year when Twitter’s mobile advertising revenue is expected to amount to $272.6 million, and Facebook’s mobile ad revenue will reach an estimated $387 million. At the moment, however, Facebook even trails Pandora, which is currently bringing in $226.4 million in mobile ad revenue. But Facebook is expected to surpass the music streaming service in 2013 to become the second-highest mobile revenue generating company in the study, next to Google, which brings in a chart-topping $750 million.