Facebook Inc (NASDAQ:FB) and Twitter Inc (NYSE:TWTR) are going to have major revenue gains from mobile advertising as reported by Estimize, a market research firm. Estimize’s research is based on the earnings per share and revenue estimates for U.S. listed publicly traded companies, based on a broad community ranging from hedge funds analysts, independent traders, industry experts and students who are interested in financial markets. The company runs a bunch of algorithms on the data before using it to make sure that it is clean. CNBC interviewed Leigh Drogen, CEO of Estimize to discuss his company’s forecast about the upswing in mobile advertising on social networking services and its major beneficiaries: Facebook Inc and Twitter Inc.
“This is again going to be a quarter of mobile monetization, specifically Facebook and Twitter. We are seeing on Estimize, the consensus by the buy-side and independent analysts who contribute to the platform surge into the reports here and that’s usually a very good sign that these reports are going to be very strong. Specifically, what we are seeing is that those mobile install ads are just operating really really really well. So many of these companies are figuring out how to monetize mobile especially on the apps and they are pushing tons of money into that marketing funnel,” Drogen said.
Since a lot of users today are accessing the web through smartphones and other mobile devices a lot of companies and independent developers that build mobile apps have resorted to social network services such as Facebook Inc (NASDAQ:FB) and Twitter Inc (NYSE:TWTR) to advertise their mobile applications. According to Drogen, Twitter Inc, despite its smaller user base than Facebook Inc, has begun to actively pursue monetization of mobile which could prove great for the company.
“Facebook is about a year and a half ahead of Twitter in terms of mobile monetization. Not in terms of scale because we all know Facebook has massive scale and Twitter is still relatively small. But in terms of actually turning on the monetization from these channels, Facebook is about a year and a half ahead, but it does look like Twitter is doing a really great job. Over the last couple of quarters the market has started to understand that Twitter is going to monetize even away from how much its user growth is taking place. The market has started to pay less attention to user growth and more attention to how big this business can be,” Drogen said.
While the power of desktop advertising is not questionable and it is not likely to slow down drastically, the upward shift on the mobile side is inevitable and it is that sense which is attracting more and more companies and independent developers to build mobile apps. And due to their sheer popularity both Facebook Inc (NASDAQ:FB) and Twitter Inc (NYSE:TWTR) will serve as major advertising platforms for developers. The difference will come down to which one of the two will benefit the most and service the developers better.
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