If you look back at marketing news headlines from a few years ago, one common theme in reports about social media marketing is that the medium has potential but hasn’t been successfully monetised. Today the story is rather different.

Whilst the first major social network, MySpace may have failed to meet its predicted potential and has suffered falling ad revenues for several quarters, rival network Facebook seems to have gone from strength to strength. With more than 500 million global users according to the site’s statistics, Facebook is set to make history as the first social network to pass the $1bn mark for ad revenue.

According to a report from eMarketer, by the end of this year Facebook will have brought in a total of £824m in ad revenue, 65% of which comes from the US market. This is over three times as much as the closest rival, News Corp’s MySpace – once the darling of social media.

However Facebook’s revenue is forecast to rise even further to £1.13bn by the end 2011 as advertisers outside of the US increase their spend by 5% of the market – which if accurate, will equate to a 165% growth in ad revenue between 2009 and 2011.

Debra Aho Williamson, a senior analyst at eMarketer says that Facebook is a “core buy” for “brand advertisers.” “Ad spending is building quickly and the mass audience is one that marketers cannot ignore any longer,” she says.

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