Facebook could generate over $1.2 billion from mobile advertising in its first year from just the US and the Euro Big 5 markets. From mobile advertising alone, Facebook would have an Average Revenue Per Mobile User of around $6.5 per annum.

Across the 6 markets – France, Germany, Italy, Spain, UK and US ‑ mobile^SQUARED estimates there are a total of 185.3 million Facebook Mobile users. According to comScore the average Facebook Mobile user in the UK spends 24 hours per month on the site. We’ve taken a slightly more conservative approach to this, and assumed a market average of 12 hours per user per month.

Based on a further assumption that Facebook will serve an ad every 20 seconds via its mobile sites or apps – not based on when the page refreshes ‑ using a CPM model of $0.25, it means Facebook would generate $653.7 million in revenues from mobile advertising in the US alone over a 12 month period.

Obviously, the US is Facebook’s biggest market, but it can still look to generate mobile advertising revenues of $166.6 million in its first year in the UK, around $100 million in France, Germany, and Italy, and around $70 million in Spain.

If we extend our coverage further, India, Brazil, Indonesia, Mexico and Turkey will all be significant markets for Facebook Mobile.

With Facebook finally opening its gargantuan doors to mobile advertising, mobile^SQUARED expects this to be the most significant development to the mobile advertising industry to date. Google’s acquisition of Admob for $750 million was a huge deal in its day, and Google expects to generate over $2 billion from mobile advertising in 2012. Facebook could potentially expect to generate similar levels of revenues over a 12-month timeframe.

Facebook will unquestionably have a profound impact on mobile advertising, but with two companies dominating the landscape, will that be a healthy environment in which to operate? Probably not. But there are other issues to contend with.

Research by mobile^SQUARED reveals that the majority of consumers (UK only) do not want to use Facebook as a vehicle to be contacted by brands. If the average click-through rate on mobile is 0.5%, then expect that figure to drop significantly on Facebook Mobile. Facebook users are engaged with content, and even more so on mobile. So banner blindness will inevitably plague any Facebook-based display campaigns.

But then again, its Facebook, and that always means billions.

nick@mobilesquared.co.uk