Twitter's US Ad Business Is Dwarfed By YouTube's And Facebook's

Despite often being viewed as a competitor to Facebook, Twitter’s advertising business is relatively small.

In fact, Facebook, YouTube, Hulu, and WebMD all have larger U.S. ad businesses than Twitter, according to company filings and BI Intelligence estimates. The chart below shows how Twitter stacks up against some of its peers in digital advertising.

(Note: the chart is not exchaustive and does not include data for Google, Yahoo, Pandora, AOL, etc. — it’s meant solely for comparison’s sake.)

Here are some other takeaways from our analysis:

  • 75% of Twitter’s ad revenue is generated from the U.S. market, but only 23% of its monthly active users are based in the country.
  • Twitter generated approximately $US91 million in revenue from U.S. ad sales in the second quarter of 2013. For comparison, Facebook’s U.S. ad sales generated more than $US720 million last quarter.
  • WebMD generated roughly $US106 million in U.S. ad revenue last quarter, $US15 million more than Twitter. That said, Twitter is growing much faster.
  • Twitter’s quarterly U.S. ad sales business grew 21% from the first quarter of this year, and 60% from the second quarter of last year.
  • Over 65% of Twitter’s ad revenue is generated by mobile devices

In our report on social media demographics, we noted how small Twitter’s user base is, which caught a lot of people by surprise because of all the media attention Twitter attracts. Not only does Twitter’s IPO filing confirm our suspicion, but it also reveals how small the company’s ad business is in comparison to other top digital properties.

There are well-founded concerns that Twitter user growth is slowing in the U.S., so Twitter’s plans to ramp up its international business will be very important.

Download the chart and data in Excel.

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