Report: 74% of Facebook Ad Revenues Comes from Local Advertisers

With Facebook planning to do over $500 million in total revenues this year, one advertising research firm says the bulk of the company’s advertising revenues are coming from local advertisers.

Borrell Associates says that of the $310 million it estimates in total advertising revenue for Facebook in 2009, nearly $230 million of that, or 74%, will come from local businesses targeting Facebook users based on their location. By comparison, Borrell estimates that only 27% of MySpace’s 2009 revenues will come from from local advertisers ($133 million out of total ad revenues of $502 million).

We spoke with Kip Cassino, Borrell’s VP of Research, this morning, and he said the firm reached these numbers by comparing known ad spending numbers by businesses it tracks, and comparing them to published estimated values for Facebook ad revenue.

Overall, Borrell estimates 20% of all social network ad spend will be local this year. That would mean Facebook is winning the local advertising battle amongst US social networks by a long shot. No other social network the company makes estimates for comes in about 15% of total ad revenues coming from local.

If true, that would obviously be a great sign for Facebook Ads. If Facebook can prove to local advertisers that it can generate leads (and demand) efficiently at the local level, it should continue to grow its share of the $150 billion local advertising market in the US as more advertisers come on board and compare Facebook to their existing local marketing channels.


Recommended articles