There's little question that Twitter's initial public offering in October was a success, but what about its ad business? Still a work in progress, but with plenty of upside, according to Ad Age readers.
Between late November and early December, Ad Age conducted its fourth major survey of marketer attitudes toward social media in conjunction with RBC Capital Markets. This time, 953 execs at marketers, agencies and media companies weighed in on Twitter.
What we found is that Twitter is viewed much like Facebook was in the summer of 2012: While many advertisers use it as a marketing channel, only a minority actually place ads there.
Among the respondents, 70% currently use Twitter as a marketing channel and 80% say they plan to use Twitter in the next 12 months. But only 46% say they've ever bought an ad on Twitter, whether a promoted tweet, trend, account or an "Amplify" TV deal.
So while they might have a social media staff or even a real-time newsroom, they're spending their Twitter budget on personnel, not on advertising.
Twitter vs. Facebook
That's in line with Facebook's story a few years ago. When we polled readers in February 2012, 86% reported using Facebook as a marketing tactic, while only 54% reported advertising there.
At the time, brands considered Facebook to be more of a content or earned-media play, and spending was about building fans and likes. Over the years, Facebook introduced new ad products, a data exchange, retargeting, and adjusted its algorithms. The News Feed became a competitive place and advertisers found they had to pay to reach an audience there.
Now, Facebook is an established part of most big-marketer media plans and is steadily taking share from legacy digital players. In September 2013, 73.5% of Ad Age subscribers polled said they spend some part of their Facebook budget on advertising.
There are reasons for Twitter to be encouraged. For one, marketers are still experimenting and there's plenty of room to grow: Of those advertising on Twitter, 51.8% say they're spending just 1%-2% of their online-marketing budget there. In the coming year, 59.2% said they expect their Twitter advertising budget to "modestly increase" or "significantly increase."
The overwhelming majority – 72.6% -- say their ROI from Twitter desktop and mobile ads are virtually the same, a great sign for Twitter's mobile business. Ad Age readers ranked it the third most-effective ad platform behind Google and Facebook, and ahead of LinkedIn, Yahoo and AOL in that order.
It all suggests that if Twitter can continue to build and retain its user base, the ad market will follow. Big ifs, but in a sense Google and Facebook have paved that road.
The full results of the survey are available to DataCenter subscribers.
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