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Twitter tops Facebook in mobile ad revenues

Despite Facebook's recent ad-related push, rival Twitter is besting the social network when it comes to US mobile ad revenue.

According to a new eMarketer report, Twitter earned $129.7 million (£81.4 million) in mobile ads this year, while Facebook earned $72.7 million (£45.6 million).

Neither company ranks among more established platforms like Google and Pandora, which have taken years to hone their advertising craft, and pulled in $1,423.1 million (£892.9 million) and $226.4 million (£142.1 million), respectively. Millennial Media and Apple both pulled in more than Facebook, capturing $84.1 million (£52.8 million) and $75.1 million (£47.1 million) in 2012, respectively.

"The increasing focus on mobile by both Twitter and Facebook, as well as other major digital advertising publishers, will continue to [grow] in the overall U.S. mobile advertising market," which eMarketer forecasts will reach a total $2.61 billion (£1.64 billion) this year, the company said.

In June, Twitter CEO Dick Costolo reported that its mobile platform surpassed its website in terms of generating advertising revenue, a milestone that came four months after the company introduced ads into smartphone and tablet users' application timelines.

The Promoted Tweets option has helped to tighten the integration between the company's ad products and the core user experience, eMarketer said.

Meanwhile, Facebook, which rolled out premium advertising on mobile devices earlier this year, still earns most of its revenue from desktop ads, which don't show up in the mobile apps.

Taking a look into its crystal ball, eMarketer forecasted that Facebook's revenues will reach $629.4 million (£394.7 million) by 2014, compared to the expected $444.1 million (£278.5 million) from Twitter. In two years, Facebook could be ranked as the second-highest mobile ad earner, behind Google and its significant lead.

Google's dominance is a result of the company's strong position in the mobile search ad market, eMarketer said. Google has cornered the market with about 95.4 per cent share of revenues, leaving only 4.6 per cent of the estimated $1.28 billion (£802 million) advertisers will spend this year to competitors, like Microsoft's Bing.

"Despite the growing focus from major ad publishers, mobile remains a relatively small portion of the overall US ad market," eMarketer said, with mobile representing only about 1 per cent of total US spending this year.

EMarketer based estimates on analysis of reported company revenues, as well as other research firms' advertising revenues, pricing, impressions, and other factors. Major mobile advertising publishers' usage trends and eMarketer interviews with executives also play a role.

This year's numbers are based on revenues after companies paid traffic acquisition costs to partner sites – a new process for the data publishers.