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Facebook Ad Revenues Forecast to Reach $4.05 Billion in 2011

SOCIAL NETWORK GRABBED $1.86 BILLION IN GLOBAL AD REVENUES IN 2010

NEW YORK, NY (Jan 18, 2011)–eMarketer estimates ad spending on Facebook will reach $2.19 billion in the US this year and just over $4 billion worldwide–more than double last year’s figure of $1.86 billion in global ad revenues. By 2012, worldwide ad spending on Facebook is expected to reach $5.74 billion, up 42% over 2011.

“2010 was the year that Facebook firmly established itself as a major force, not only in social network advertising, but all of online advertising,” said eMarketer principal analyst Debra Aho Williamson, author of the upcoming report “Worldwide Social Network Ad Spending: 2011 Outlook.”

eMarketer estimates Facebook accounted for 4.7% of the $25.8 billion US online ad market in 2010. This year, its share will rise to 7.8% as it adds an estimated $1 billion in US ad revenues to its 2010 base.

This forecast is significantly higher than eMarketer’s previous estimate, from August 2010, which put Facebook ad spending at $1.3 billion worldwide in 2010 and $1.8 billion in 2011.

One major reason for the shift is Facebook’s phenomenal user growth.

“Facebook has clearly locked up the US market and even with the growth of other international social networks, its global presence is something that multinational marketers can’t ignore,” Williamson said.

Meanwhile, performance marketers also continue to increase their use of Facebook’s self-serve ad system, which eMarketer estimates now accounts for as much as 60% of total ad spending on Facebook, up from 50% in mid-2010.

“If Facebook can keep growing its global user base and boost the amount of revenue it generates per user, it could even surpass these forecasts,” Williamson added.

This estimate does not include any Facebook revenue from sources other than advertising, such as Credits.

The dramatic increase in spending on Facebook will push US ad spending on all social networking sites to $3.08 billion this year, eMarketer forecasts. Spending will be up 55% over the $1.99 billion US advertisers devoted to social networks in 2010 and will rise by a further 27.7% next year to reach nearly $4 billion.

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Posted on January 18, 2011.