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Twitter Takes to TV Tie-Ins

3/31/2014

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User growth slows, but Twitter’s ad revenues are growing rapidly

Twitter showed in 2013 that its ad business is growing fast. Even as user growth slowed dramatically, ad revenues and ad engagement metrics ticked up.

Advertisers cite three reasons why they’re increasing spending on Twitter: The social network’s tie-ins with TV, its real-time nature and its willingness to partner closely on creative executions. Other developments that will drive growth this year include improved analytics, more ad offerings for international markets and additional ad products in the direct-response and ecommerce areas, according to a new eMarketer report, “Advertising on Twitter: Unique Opportunities Outweigh Slowing User Growth.”

Twitter spent much of 2013 solidifying its connections with TV. It launched a new ratings business with Nielsen to measure TV-related conversations on Twitter; created new video ad opportunities with Amplify; and bolstered its association with high-profile TV events such as the Super Bowl, Grammys and Oscars.

Twitter’s linkups with television are beneficial to both the TV industry and the social network. TV executives know that many people multitask on mobile devices while watching TV. On-air mentions of Twitter drive conversation about what’s on TV and help keep viewers focused on the television.

In December 2013 polling by RBC and Advertising Age, 22% of US advertising professionals said they’d bought Twitter ads in conjunction with a TV ad campaign. Considering that programs such as Amplify are less than a year old, this constitutes positive momentum.

Advertisers that buy sponsorship packages for sports or other large-scale televised events are starting to see Twitter ads as an integral part of their overall media plan. However, there’s a caveat to looking at Twitter as a parallel to TV. Advertisers can reach an engaged audience on Twitter, but that audience by no means rivals the size or demographic makeup of the audience watching a TV program. Advertisers, then, must put engagement before reach when they sync up their TV advertising with ads on Twitter.

Twitter is focused on improving its connections with TV, and it has been bolstering its case with TV advertisers with a series of studies. Among the findings:

  • Twitter users were less likely to change the channel during ad breaks: In a November 2013 study from Symphony Advanced Media, 8% of Twitter users did so, compared with 17% of those who were not multitasking and 13% of those who multitasked with a mobile device while watching TV.
  • Viewers watching TV while using Twitter had higher ad recall: In a December 2013 study by Millward Brown Digital, those watching without a second-screen device had average ad recall of 40%, while those using Twitter had average recall of 53%.

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Instagram Usage in the US Surges 35% in 2013, Rivals Twitter for Smartphone Audience

3/31/2014

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User counts among millennials and Gen Xers are nearly equal on both sites Just how many people in the US use Instagram, the photo- and video-sharing service Facebook acquired in 2012? According to new figures from eMarketer, Instagram usage in the US has ramped up rapidly and is already maturing, reaching regular usage levels nearly matching Twitter’s, particularly on smartphones and among millennials and Gen Xers.

Nearly 35 million people in the US accessed Instagram at least once per month in 2013, according to eMarketer’s latest forecast—representing double-digit but not spectacular growth over 2012. By the end of this year, almost 25% of US smartphone users will snap a photo, slap on a filter and share their creations with friends on Instagram on a monthly basis (or, at least, sign in and check out what their friends are posting).

User counts for Instagram and Twitter are strikingly similar. eMarketer estimates that 43.2 million US consumers used Twitter monthly last year—or 17.6% of the total internet user population. Meanwhile, Instagram users represented 16.1% internet users. Limiting that figure to smartphone Twitter users, Twitter hit just 30.8 million in 2013; this will increase to 37.3 million in 2014, or 22.7% of US smartphone users. Both figures fall slightly below those for total Instagram users, and while Instagram activity all but exclusively takes place on smartphones (meaning Instagram’s smartphone user base could be higher than Twitter’s), it is possible for Instagram users to have an account online without accessing the service through a smartphone. As a point of reference, eMarketer pegs US smartphone Facebook users at 123.7 million this year.

Twitter’s US user base shows signs of maturing in its demographic composition, spreading the user population more evenly across age groups, while Instagram is still largely limited to a pool of millennial and Gen X users. Last year, 69.0% of Instagram’s users were ages 18 to 44. This year, that figure will drop, but only to 67.5%, and over time, Instagram’s user base in these age groups will approach, but not surpass, Twitter’s. eMarketer does not expect significant shifts in usage by age for either site within our forecast period, and Instagram’s user count among 18- to 44-year-olds will remain about 1 million fewer than Twitter’s in each year throughout our forecast.

One demographic shift well under way for Instagram, however, is an evening out in terms of gender. In 2012, about two-thirds of Instagram users were female. While women still make up the majority of users, by 2016 the ratio is expected to reach 55% female vs. 45% male.

eMarketer bases all of our forecasts on a multipronged approach that focuses on both worldwide and local trends in the economy, technology and population, along with company-, product-, country- and demographic-specific trends, and trends in specific consumer behaviors. We analyze quantitative and qualitative data from a variety of research firms, government agencies, media outlets and company reports, weighting each piece of information based on methodology and soundness.

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