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Why more competition from digital media hurts TV ad sales

Part 3
Why more competition from digital media hurts TV ad sales (Part 3 of 6)

Key social media ad spending trends for companies like Facebook

Advertisers spent 127% more on Facebook than Twitter

In the last couple of articles of this series, we discussed how the Internet, and in particular mobile Internet, has started to become the preferred media, replacing TV as the medium for advertisers to spend money. In this article, we’ll discuss why advertisers perceive social media as their preferred medium to spend advertising money. According to a report from Resolution Media, which manages social media ad spending for clients, advertisers invested 127% more in Facebook (FB) than Twitter (TWTR) in 2013. The clients that the agency handles include Pepsi (PEP), Lowe’s (LOW), and McDonald’s (MCD).

Advertising Spend Facebook vs TwitterEnlarge Graph

A larger reach and new ad formats drove growth in Facebook

Higher advertising spending in Facebook is quite logical, as Facebook has more than 1.2 billion monthly active users compared to only 240 million monthly active users for Twitter.

According to Resolution Media, “New ad formats and targeting capabilities also drove growth in Facebook advertising campaigns. Not only did advertisers increase investments in successful ad campaigns; they also embraced various new alpha and beta Facebook advertising opportunities. The number of new Facebook advertising opportunities available to Resolution clients in 2013 outpaced Twitter, and mobile advertising offerings led the pack. For the most part, advertisers achieved positive results in comparison to key performance indicators (KPIs), and in many cases, this led alpha and beta campaigns to grow and develop into ongoing efforts. Facebook launched Partner Categories, for example, enabling advertisers to leverage third-party data to target users based on online and offline purchase behavior.”

Resolution Media further commented, “Facebook’s relative maturity as a direct response channel, combined with these new ad offerings, explains much of the strategic thinking that drove advertisers to spend more with Facebook. Add to that the sheer reach and supply of advertising inventory offered by Facebook, and it’s easy to understand what led advertisers to spend more than twice their Twitter budgets with Facebook.”

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