With news cycle ratcheting up prior to Facebook's IPO tomorrow, mobile ad company Velti sees good times ahead for Mark Zuckerbery's merry band.
Writing a column on Forbes, CMO Krishna Subramanian reckons that one banner ad on Facebook's mobile app could generate $2 billion a year.
Do the math
His calculation is a little back of the envelope, but it goes as such...
There are currently 83 million users of Facebook's mobile app. On average, they spend 441 minutes a month on the app.
So, if you served a performance ad impression every 60 seconds - with an eCPM of 50 cents - you'd generate $7.9 million per month.
Serving a premium brand advert, at $10 eCPM, would generate $158 million per month, however. (The assumption is that the slot is split between these two models as there's unlikely to be sufficient brand inventory.)
The combined result would be $1.99 billion in revenue per year.
Range of accuracy
Obviously, there are some interesting assumptions in this calculation; notably the 50:50 split between performance and brand advertising, and the frequency of ad rotation.
Perhaps, it would be more correct to say that Facebook could make between $95 million (for pure performance) and $2 billion a year.
That's not quite so catchy though.
[source: Forbes]
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Contributing Editor
A Pocket Gamer co-founder, Jon is Contributing Editor at PG.biz which means he acts like a slightly confused uncle who's forgotten where he's left his glasses. As well as letters and cameras, he likes imaginary numbers and legumes.
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