Here's The REAL Reason Twitter's Mobile Ad Revenue Is Crushing ... - Business Insider

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Bloomberg's Katy Finneran just tweeted: "BREAKING: #Twitter's 2012 mobile ad revenue exceeds Facebook's 2012 mobile ad revenue, $129.7 million to $72.7 million."

The numbers, it seems, are based on year-end predictions from eMarketer.

They sound pretty impressive for Twitter and bad for Facebook.

But want to know the real reason for the disparity?

Facebook only started selling mobile ads this summer. Twitter started at the very beginning of the year.

So, actually, it would be pretty embarrassing for Twitter if it ended the year behind Facebook after a six month head-start.

And now for a more important point: eMarketer's numbers should not be trusted.

In this case, they are obviously off.

According to disclosures made by Facebook COO Sheryl Sandberg during the company's last earnings call, Facebook mobile ad revenues have reached a $500,000 daily run rate in June.

There are six months between June and the end of the year. 180 or so days. That means Facebook's mobile ad revenues – if they do not grow at all, despite efforts to ramp them up – will come in closer to $90 million than $70 million in 2012.

If you leave this post with one thought, let it be this: eMarketer predictions are a waste of your time.

Smartly, eMarketer makes big, bold predictions that it hopes will get a lot of press, so that lots of media outlets will link to their Web page, where industry people can buy research from eMarketer.

The problem is that eMarketer has an incentive to be controversial, rather than accurate.

In 2007, eMarketer said online video ad spending would reach $4.3 billion in 2011. In 2011, it revised its numbers to $2.16 billion. There are countless examples of whoppers like this from that firm.

(One thing that utterly galls me is how they use such precise decimals. Online video ad spending will not reach about $4 billion in 2011. It will reach four point three billion, thank you very much. Egad, such nonsense.)

There is nothing particularly unethical about this. Lots of small analyst firms have the same marketing model. 

For a more thorough take down of eMarketer's awful prediction-making, read this post from Digiday.