Red Herring

THE BUSINESS OF TECHNOLOGY

  • Startups
  • Mobile
  • Enterprise
  • Consumer
  • Social
  • Events

Facebook to Bank $1.2 B Per Year on Mobile Ads

February 20, 2012

Though Facebook has yet to advertise on mobile devices (smaller screens present enormous marketing hurdles), that hasn’t stopped the web world from speculating just how much the social media agency stands to make when it does break out the mobile advertising banners.

UK-based analyst firm Mobile Squared took its stab at the question, and reasoned that Facebook stands to make an average revenue per mobile user of $6.50 per year, about $2 more than it currently makes off each online user. Mobile Squared based its math on Facebook’s S-1 issued earlier this month. That said, the analyst firm reckons Facebook could easily generate over $1.2 billion off mobile advertising in its first year just from the US and Euro Big 5 markets.

Mobile Squared estimated there are 185.3 million Facebook Mobile users in the six markets that include France, Germany, Italy, Spain, UK and US. It then followed a comScore statistic stating the average UK mobile user on Facebook spends an average of 24 hours per month on the site, but took a more conservative approach by basing its math on half that figure at 12 hours per month.

The analyst firm then takes the assumption that Facebook will serve an ad every 20 seconds, not based on page refreshes. Using a CPM model of 25 cents, Facebook would generate $653.7 million in revenues from mobile ads in a year just in the US alone.

Of course, that assumption is practically a flying leap, as Facebook has given no indications on how it will run mobile advertising when the time comes. While Mobile Squared hangs its math on the reasoning that Facebook will use mobile display styled ads, the social network has yet to hint on how it will handle advertising formats, with several reports even suggesting the company will turn to sponsored stories or other alternative advertising methods.

But continuing to play the game of “What if?” with a calculator, Mobile Squared reasons that Facebook could generate mobile advertising 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.

The analyst firm also points out that India, Brazil, Indonesia, Mexico and Turkey will also offer substantial marketing opportunities for Facebook Mobile.

“With Facebook finally opening its gargantuan doors to mobile advertising, Mobile Squared expects this to be the most significant development to the mobile advertising industry to date,” concluded Nick Lane, Mobile Squared’s chief strategy analyst in the report. “Google’s acquisition of Admob for $750 million was a huge deal in its day, and Google expects to generate over $2 billion from mobile advertising in 2012. Facebook could potentially expect to generate similar levels of revenues over a 12-month time frame.”

  • 
  • 
  • 
  • 

Filed Under: Editorial, Features, Finance, Internet, Social, Top Stories

Related Articles

  • Threads Reaches 100 Million Sign-Ups in Record Time 
  • Twitter to Limit Recommended Timeline to Verified Users 
  • Meta Hit With Record 1.2bn Euro Fine 

Widget Spacer

Top 100

The Red Herring Top 100 awards highlights the most exciting startups from Asia, Europe and the Americas.

Learn More

Upcoming Events

  • Top 100 Asia

  • Top 100 North America

  • Top 100 Europe

Widget Spacer

Guest Column

What is a Learning Management System?

Rouben David, of CourseForMe.com, outlines the features and benefits of

Widget Spacer

Subscribe

Subscribe now to get event news and updates delivered right to your inbox:

Widget Spacer

#DigitalHerring Tweet

My Tweets
  • About
  • Press & Media
  • Contact Us
Red Herring LinkedInRed Herring Facebook

Copyright © · Red Herring, Inc.

Copyright © 2025 · Red Herring Theme on Genesis Framework · WordPress · Log in