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Facebook led the market in social-network advertising in 2010, racking up $1.86 billion of the ad revenues in the U.S. and abroad, thanks to its massive network of 600 million-plus users.
Facebook will bolster its market-leading position in 2011, growing ad sales nearly 28 percent to hit $4 billion worldwide, eMarketer said Jan. 18.
The breakdown is fairly even: $2.19 billion in the United States and $1.86 billion overseas, meaning the social network’s prospects are bright around the globe.
The projected $4 billion in ad revenues is impressive for a social network that a few years ago struggled to formulate a business model without infringing on user privacy.
The figure still appears lean, compared with Google, which rakes in some $6 billion in ad revenues in a single quarter. But Google’s quarterly ad revenues have leveled off to between $5 billion and $6 billion the last few years.
EMarketer’s report comes two days before Google will report fourth-quarter earnings. Wall Street analysts expect Google to report net revenues of $6.05 billion and earnings per share of $8.07.
That’s still far and away more than any ad purveyor, but financial analysts emphasize that Google’s growth has slowed.
Meanwhile Facebook’s ad growth is nothing short of meteoric: $740 million in 2009, $1.86 billion in 2010 and $4 billion expected for 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 analyst Debra Aho Williamson. “In 2011, its global presence is something multinational advertisers can’t ignore.”
“If Facebook can continue to increase its global user base and boost the amount of revenue it generates per user, it could even surpass these forecasts,” Williamson said.
Williamson said she expects Facebook’s 2012 ad revenues to approach $5.76 billion, which seems conservative.
Given Facebook’s current growth trajectory and an average user engagement of 20 minutes per day seeing social ads, it might not be a stretch to presume Facebook could post $8 billion in ad revenues-double the expected 2011 total-in 2012.
People are visiting Facebook and spending more time there than they are at Google, according to researchers.
ComScore said U.S. Web users in August spent 41.1 million minutes on Facebook, compared with 39.8 million minutes on all of Google’s Websites combined, including YouTube, Gmail and other properties.
Facebook accounted for 8.93 percent of all U.S. visits between January and November 2010, with Google.com notching 7.19 percent of visits, according to HitWise.
Bottom line: Facebook is eclipsing Google in several user-engagement categories. It will be interesting to see how Google responds in 2011.