Researcher eMarketer cuts Facebook ad forecast but it’s still going to pull in $4.2bn

Facebook’s ad sales will hit $4.27bn in 2011 according to researcher eMarketer, $205m less than it forecast some time ago, an increase of 104 per cent on 2010’s $1.86bn.

The soaraway social media site should make $470m from its Facebook Credits virtual payments programme in this period, helping it to overtake Yahoo as the biggest online display medium in the US. Google is third.

The $205m shortfall, according to eMarketer, has been caused by attempts to “streamline its advertising inventory,” being more choosy about its ads presumably. Next year Facebook is forecast to take $5.78bn.

As a comparison ITV, the biggest terrestrial TV station in the UK, took $3.2bn (£2.1bn) in ad revenue last year and it’s been going since 1955.

Such forecasts will be music to the ears of new Facebook CMO Carolyn Everson (pictured) who quit Microsoft for Facebook in March.

EMarketer’s Debra Aho Williamso poured a little cold water on Facebook by noting that:“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. Facebook must either work to improve its click-through rate or show advertisers that advertising on the site is effective even without a click or other action.”

Everson will no doubt be concentrating on the latter as, with 750m users and growing, Facebook is now firmly on the media agenda of the world’s big marketers as instanced by its sweetheart deal with Diageo earlier this week.

As with Google, it has advertisers queuing up to use it but not quite knowing how. Which means it does not just take their money but actually shapes the communication itself, which gives it huge leverage in the market and poses a direct threat to media agencies.

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.