Social Media

Facebook vs. Twitter: Giants battle for holiday ad dollars

Chris Ratcliffe | Bloomberg | Getty Images

In Twitter's first holiday season as a public company, it hopes to prove itself to advertisers and investors. The holiday season is always the biggest for ad-driven companies, and retailers are expected to spend more money than ever on digital ads this year—a projected $9.4 billion, up 15 percent from 2012, according to eMarketer.

This holiday season Facebook is expected to draw 70 percent of social ad spending versus Twitter's 30 percent, according to Shift Marketing, a platform that works with hundreds of brands, including 10 of the top 20 global advertisers.

But Twitter is making progress. Facebook had 90 percent to Twitter's 10 percent in 2012, Shift said. Both companies are pushing for a bigger piece of a growing pie, trying to snag last-minute spending by promoting their advantages and encouraging innovative campaigns that showcase their tools.

Twitter says the number of retailers using its ads has nearly doubled since last fall. Last week, the company unveiled a study that found users spend more money around the holidays and turn to Twitter to research products and deals.

Sports gear company REI is responding to those who tweet gift dilemmas #REIGIFTS by tweeting back over 100 videos with suggestions and solutions.

REI Vice President of Marketing Annie Zipfel said, "What we love about using Twitter is that it enables a very quick interaction where a member or customer can tell us what they're looking for, or what's of interest,in a very direct format, and we can respond really quickly."

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REI is one of many retailers experimenting with Twitter's real-time feedback with real-time offers. @BestBuy is running a #TrendingTech campaign, streaming a list of the top gifts trending on Twitter, in stores and online. Retailer@Yoox is using Twitter to drive traffic to online retail. It is featuring an interactive video with four different styles, allowing users to shop directly "from" the video itself.

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Facebook, meanwhile, is looking to build on its leadership position. It just posted a "Facebook for Business" blog stressing its strength in mobile—the fastest-growing ad category. It details how retailers use targeting tools to reach existing customers and find new ones, plus stay connected to shoppers through the holidays by using ads to entice them to download an app.

Facebook worked with Target to develop its Cartwheel deals app and integrate it into the social network. The mobile app is expected to generate $100 million-plus in incremental sales.

"We know the Target guest is a really digitally enabled guest," said Target CMO Jeff Jones. "We have nearly 23 million Facebook fans, and so we knew it was a great large-scale platform for us to partner with. We took that partnership to a whole new level by co-developing this app with their engineers, and that ... was really special."

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A range of brands are stepping up their Facebook presence for the holidays.

In a statement, food and beverage giant Mondelez International said it is looking to "leverage Facebook's targeting capabilities … as we near the holiday season."

T-Mobile said it has purchased a holiday package of Facebook ads that will run from Thanksgiving through Cyber Monday, with a big emphasis on mobile.

It's not a zero sum game. Retailers generally run campaigns on both Facebook and Twitter, and increasingly on Pinterest. Though all three will surely increase their ad revenue this holiday season, Twitter and Pinterest's growth will be more dramatics as it's coming off a smaller base.

—By CNBC's Julia Boorstin. Follow her on Twitter: @JBoorstin.