Facebook on track for $1b in mobile ads

Shailendra Pandey/Informa Telecoms and Media
08 Feb 2013

Facebook is well on-track to generate revenues of over $1 billion from mobile advertising in 2013.

Looking at the company’s financial performance for the last two quarters, Informa Telecoms & Media predicts that Facebook alone could take around 10% share of the global mobile advertising revenues in 2013.

The global mobile advertising market is forecast to generate revenues of $12.8 billion in 2013, according to our latest research.

The contribution of mobile advertising in Facebook’s total ad revenues grew from 14% in Q312 to 23% in Q412. During this period, Facebook made mobile advertising revenues of around $457.9 million ($305.9 million in Q4 and $152 million in Q3).

Provided Facebook can continue to get at least 20% of its total ad revenues from mobile, it should be able to easily make over $1 billion from mobile advertising in 2013.

Facebook’s results for the last two quarters are encouraging, especially as there were growing concerns about its ability to monetize the growing mobile traffic after the company’s disappointing first earnings report following its IPO in May 2012.

However, despite the improving results, Facebook is yet to establish a good enough model for mobile advertising that can consistently attract brands and advertisers. Compared to ad spending on the fixed internet, brands are spending much less on mobile advertising and this is a worrying trend for Facebook and other internet brands seeing increasing shift of their service usage from desktop to mobile.

Shailendra Pandey is a senior analyst for content and applications at Informa Telecoms and Media. For more information, visit www.informatandm.com/

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