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How Twitter kicked Facebook's butt in Q1 advertising performance.

Twitter dominated ad performance in Q1. Here's why.

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In this photo illustration, the Facebook logo is reflected in the eye of a girl on February 3, 2008 in London, England. Facebook recently purchased the rising star start-up, Instagram, for $1 billion US. (Chris Jackson/AFP/Getty Images)

The main difference between ads on Twitter and Facebook is that almost all Twitter ads are integrated into users' tweet-streams whereas Facebook focuses more heavily on display ads at the side of users' feeds.

This has paid handsome dividends for Twitter, according to a study of 45 billion ad impressions on Twitter and Facebook in Q1 2012 by TBG Digital. TBG is a seller and manager of ads on Facebook. The study looked at cost-per-thousand impressions, click-through rates and cost-per follower to advertisers.

Twitter gets significantly higher CPMs than Facebook and earns more money per impression than Facebook, it turns out. Twitter's CPM's can reach more than $3.50; Facebook's are often less than 50 cents, the data show.

The difference seems to be that users shy away from display advertising because it's so obvious.

"Facebook puts ads on the right-hand side, which people recognize as ads," TBG CEO Simon Mansell says. "Twitter puts ads in the stream so it looks more like content. When ads are in-stream you get better click-through performance."

This explains, in part, why Facebook has been so keen on developing Sponsored Stories both for its web site and its mobile apps.

See the charts on Twitter and Facebook's Q1 ad performance >

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