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Facebook could generate $1.2bn from mobile advertising in its first year from just six markets, according to research firm MobileSquared.

This would put it second only to Google, which is expected to generate $2bn from mobile ads in 2012.

The six markets included in MobileSquared’s estimate are the US, UK, France, Germany, Italy and Spain - which have a combined total of 185.3m Facebook users.

Based on the assumption that each user spends 12 hours on the mobile site on average per month, and that Facebook will serve an ad every 20 seconds using a CPM model of $0.25, the ad platform could generate revenues of $653.7m in the US alone over a 12-month period.

This is compared to revenues of $166.6 million in its first year in the UK, around $100 million in France, Germany, and Italy, and around $70 million in Spain.

Using MobileSquared’s formula, the global total will be much higher when taking into account India, Brazil, Indonesia and Turkey - all of which will be important markets for Facebook Mobile.

Facebook’s entry into the mobile ad market is already having an impact on its competitors months before it is expected to launch.

Last week Google changed the way it charges for mobile ads to an AdWords-style auction, where the winning price is determined by the quality of the ad and the other bids on that impression.

In response Apple has slashed its iAd pricing from roughly $400,000 per campaign to $100,000 – down from £1m when it initially launched in 2010.

It has also increased the amount of ad revenue paid to developers from 60% to 70% and dropped an additional fee that advertisers had to pay when a user clicked on their ad.

David Moth

Published 20 February, 2012 by David Moth @ Econsultancy

David Moth is Editor and Head of Social at Econsultancy. You can follow him on Twitter or connect via Google+ and LinkedIn

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Suresh Babu

Mobile networks are changing the face of advertising for good. If social media is the new advertising method, then considering mobile device for airing social media along with advertisement will kindle the interests of the users to like the ad or proceed with the work they intend to.

over 4 years ago

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