Investors have rushed to Twitter, with its share price doubling after its overnight IPO.
But for small business owners, tying their marketing budgets to Twitter’s burgeoning advertising offering isn’t as cost-effective as doing the same with Facebook.
According to Larry Kim, the founder and CTO of search marketing firm Word Stream, small businesses won’t get the best return on investment using both social networks.
“Facebook beats Twitter, but both have a lot of work to do for direct response advertisers,” he told SmartCompany.
Word Stream’s research involved comparing Facebook and Twitter advertising across a number of metrics, including network reach, ad performance, mobile ad performance, and the flexibility of ad formats.
It’s difficult to gauge ultimate effectiveness, Word Stream writes, because Twitter doesn’t release all the same metrics around advertising that Facebook does. But the marketing firm tried to draw out similar metrics on which to compare the two.
Facebook’s network is vastly larger than Twitter’s, reaching 1.15 billion daily users compared to Twitter’s 232 million.
Twitter’s smaller reach doesn’t result in it offering discounts. In fact, the cost per impression of a Facebook ad is $0.59, while the same impression on Twitter sets advertisers back $3.50. But ‘engagement rates’ for Twitter ads can be as high as 1-3%, which is much higher than Facebook’s 0.119%.
However, the revenue per visitor to an ad is, on average, $0.93 for Facebook compared to $0.44 for Twitter.
Facebook’s advertising performance varies greatly depending on what is being advertised, Word Stream notes.
The big advantage of Twitter is its mobile ads. This is because Twitter works generally better on mobile, being more reliant on text and less on pictures. By 2015, Twitter expects to net $1.33 billion in worldwide ad revenue, and more than 60% of that will come from mobile.
When it comes to offering flexible advertising options, Facebook allows advertisers to pick from 10 different ad formats, while Twitter limits its advertisers to just three – promoted tweets, promoted accounts or promoted trends.
While Facebook advertising is cheaper, and brings in more revenue from users who engage with it, neither Facebook nor Twitter are great advertising options for lead generation marketing, Kim writes.
“The intent just isn’t there compared to search,” Kim says. “These social platforms are better for big brand advertising and engaging with your fans through content marketing. If you have the budget for those kinds of marketing activities, then you’re better off on Facebook than Twitter, but the reality is, neither is all that effective and both platforms have a ton of work to do on the paid side.”