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Facebook to Double Worldwide Ad Revenues This Year

Global ad revenues of $3.8 billion include $2.01 billion from US

Worldwide ad revenues for Facebook will rise 104% this year to $3.8 billion, eMarketer estimates. As the social network doubles its advertising intake, it is also diversifying its revenue streams and adding dollars through other means, like Credits.

eMarketer’s forecast updates earlier estimates for 2011 Facebook revenues. In January, eMarketer forecast ad revenues would reach $4.05 billion this year.

“This slight revision downward for 2011 should not be taken as a sign that Facebook’s overall business is losing momentum,” said Debra Aho Williamson, eMarketer principal analyst.

“Facebook’s revenue streams will continue to diversify, with ads representing a decreasing proportion of total revenue while other sources, such as Facebook Credits, will grow,” said Williamson.

Total revenues at Facebook, which include those from advertising as well as Facebook Credits and other sources, will reach $4.27 billion this year, eMarketer estimates. That’s more than twice as high as the $2 billion Facebook is estimated to have earned in 2010. Ad revenues will make up 89% of the total this year, down from 95% in 2009.

eMarketer forms its estimates of Facebook revenues based on a meta-analysis of estimates on consumer usage, marketer usage, ad pricing and impressions on Facebook, as well as revenue estimates from research firms and other sources and interviews with industry executives.

Within the US, Facebook ad revenues will surpass $2 billion this year, accounting for just over half the worldwide total. US ad revenues will continue to rise at a rapid clip, but overseas ad dollars will represent 50% of the pie next year and a slight majority by 2013.

Despite a positive outlook, Facebook will continue to have to prove to advertisers that its products deliver results.

“Even though Facebook has spent several years wooing marketers, many of them still believe the ads aren’t effective at driving clicks and other actions,” said Williamson. “Facebook must either work to improve its clickthrough rate or show advertisers that advertising on the site is effective even without a click or other action.”

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Check out today’s other article, “Case Study: Geo-Targeted Shoppers Show Strong Purchase Intent.”

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