Merrill Lynch: Facebook mobile ad revenues will eclipse desktop next year

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Revenues from Facebook's (NASDAQ:FB) mobile advertising initiatives will eclipse its desktop efforts next year, according to a new Merrill Lynch forecast.

"We believe Facebook's advertising revenue will accelerate at least through [the first quarter] and we are raising our advertising estimates 6 percent to 7 percent for 2013 and 2014," Merrill Lynch analyst Doug Anmuth wrote in a report to investors. "We are raising our mobile news feed estimates in our bottom-up ad model to $2.37 billion in 2013 and $4.0 billion in 2014, up from $2.0 billion and $3.3 billion previously, and we expect mobile to surpass desktop ad revenue in 2014."

Anmuth credited the revised forecast to positive marketer feedback on Facebook news feed campaigns as well as the social network's "ability to leverage third-party data." The report cites the example of Samsung Electronics, which relied on Facebook to promote the launch of its Galaxy S III smartphone. The device maker generated "$129 million in sales attributable to Facebook, delivering an ROI of 13X on Samsung's $10 million of Facebook ad spend," Anmuth noted.

As of the third quarter of 2012, mobile initiatives account for 14 percent of Facebook's total advertising revenues. In addition to ads in users' news feeds, the company has introduced mobile units designed to drive iOS and Android app installs, targeting consumers based on the apps and games they already access on their smartphones. Late last month, Facebook halted a trial that inserted mobile advertisements into selected third-party iOS and Android apps: "While the results we have seen and the feedback from partners has been positive, our focus is on scaling ads in mobile news feed before ads off of Facebook," a Facebook spokesperson told Mashable.

Sources told All Things D that Facebook also has halted plans to run ads across publisher partners' mobile sites, explaining that publishers remain concerned that Facebook is not yet ready to deliver external mobile ads capable of generating significant value for the social network or its partners. That belief is driven, at least in part, by the relatively low rates Facebook commands for ads across its own platform. One publisher said that while rival ad networks like Google (NASDAQ:GOOG) have gained traction by offering publishers a guaranteed revenue threshold regardless of ad performance, Facebook has not yet proposed similar terms, instead discussing a "generous" revenue split.

Facebook now touts more than 1 billion users worldwide, with roughly 600 million accessing its services via mobile.

For more:
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