Growing Mobile Usage Fueling Facebook’s Advertiser Advantage Over Twitter
Social networking giants Facebook (NASDAQ:FB) and Twitter (NASDAQ:TWTR) are often compared in terms of user engagement, user base and their rate of growth. This is natural, considering the companies were established within two years of each other, both compete for user attention, and both had similar blockbuster initial growth trajectories.
However, Facebook has leaped far ahead of Twitter over the past few years on several counts, including user growth, user engagement, active advertisers and ad revenue generation. Facebook recently crossed the milestone of 4 million advertisers on its namesake main website, growing its advertiser base at an average rate of 167,000 per month in the last six months. A vast majority of these advertisers are small businesses, and 70 percent of them are outside the U.S. These are incredible numbers considering Twitter is expected to have grown its advertiser base at an average rate of just 5,000 per month in the same period. 
The current rate of growth of Facebook’s advertiser base is considerably higher than the 48,000 per month reported by the social media giant in the period of June 2013-February 2015. Management stated that the improving rate of growth was attributed to increasing mobile usage, which is witnessing much higher user engagement than desktops. In the quarter ending June 2016, mobile advertising revenue grew 81% year-over-year (y-o-y) and contributed 84% of the company’s total ad sales of $6.2 billion, up from 76% in the prior year quarter. About 92% of Facebook’s 1.7 billion users are active on the mobile version of the website/app on a monthly basis. 
Another interesting development is that Facebook-owned Instagram now has over 3x more advertisers than Twitter, which has been selling ads for significantly longer than Instagram. Instagram recently crossed the 500,000 advertisers mark, growing its advertiser base at an average rate of about 50,000 per month.
Advertisers, Users & Revenue
It is indeed incredible that Facebook’s advertiser base is about 25 times more than Twitter, even though the number of active users is only 5.5 times that of the latter. This also translated into much higher sales figures for Facebook, with the social media giant reporting advertising revenue of $6.2 billion in Q2 2016, which was about 12 times that of Twitter’s $530 million in the same period. 
Mid Year 2016 Advertising Revenue Performance
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