Twitter Inc (NYSE:TWTR) and Facebook Inc (NASDAQ:FB) are both on a big-time expansion of their monetization opportunities. However, MKM Partners analysts think Facebook is blazing a clean trail for Twitter and note that positive advertiser feedback on Twitter’s platform creates a solid foundation for success.

What Facebook’s results mean for Twitter

In the first half of this year, Facebook has recorded a 45% growth rate in revenue per user, which has risen to an annualized run rate of $8.45. That’s compared to a 29% growth rate last year. Just in the U.S. alone, revenue per user has grown by 58% to a run rate of $26 per user.

Consensus estimates for Facebook suggest that average revenue per user will rise to $14 in two years, with U.S. users hitting $39.

Twitter ads do better than Facebook… for some

In a report dated Sept. 8, 2014, MKM analyst Rob Sanderson said that the larger ad agencies have found that Twitter ads actually perform better than Facebook ads. In fact, data from Omnicom suggests that Twitter ads might have click-through rates that are up to eight times better than Facebook’s.

Publicis / Starcom and WPP also said they have had a lot of success with advertising on Twitter. In fact, their spending commitments with the micro-blogging company are in the nine figures.

One problem though is that some smaller advertising channels are seeing more success on Facebook rather than Twitter. The Sanderson thinks this is because Twitter focused early on the major branded channels and just recently started looking at smaller ones.

As a result, he thinks the results from the large agencies better demonstrate the success levels advertisers can expect on Twitter and Facebook. He notes also that Facebook puts more resources and effort into “educating” its ad channels than Twitter does. In addition, he adds that if Twitter ads do really perform better than Facebook ads, then it suggests that Twitter could eventually see a higher revenue per user than Facebook.

Twitter must grow into its valuation

The analyst said that if Twitter keeps gaining in revenue per user, it doesn’t need any rebound in user growth in order to warrant its valuation. He said if Twitter doesn’t add any more users but hits Facebook’s projected monetization rate, Twitter could hit a market capitalization of $40 billion in or around 2018. That would give it a forward earnings per share multiple of 35 times, compared to Facebook’s current multiple of 37 times.

With a 20% compound annual growth rate, that same framework suggests a nearly $100 billion market cap in the same time frame. However, Sanderson adds that his estimates could be too low if Twitter passes Facebook’s projected monetization rate or if it keeps narrowing the monetization gap.