Facebook Inc (NASDAQ:FB) releases its next quarterly report next week, and analysts will be watching carefully for more progress on mobile advertising. William Blair analysts say they’re expecting ad revenue as a whole to be in line with Wall Street expectations at $1.7 billion. However, they say it’s the percentage of overall ad revenue which comes from mobile that will be the key metric they will be examining.

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Speaking with Facebook marketing developers

The analysts said they spoke with one Facebook Strategic Preferred Marketing Developer who said her partners spent somewhere in the high 40% of their Facebook budgets on mobile ads during the third quarter. As a result, they estimated that about 47% to 50% of Facebook’s overall advertising revenue will be from mobile.

Their conversations revealed that Facebook Inc (NASDAQ:FB)’s mobile ads are preferred by marketers than other forms of mobile advertising because of the social network’s targeting capabilities. They also found that some submitted video ads to the social network, although they don’t know when users might begin seeing these ads.

One person suggested Instagram would start being monetized during the fourth quarter and then ramp up through 2014. Also bigger advertisers could drive the social network’s revenue growth next year because these advertisers have the biggest budgets.

Buy-Side Estimates for Facebook

Analysts Ralph Schackart and Ryan Domyancic continue to have an Outperform rating on Facebook Inc (NASDAQ:FB). They issued a report with analysis of both the buy-side and sell-side views of the social network. He suspects that the buy-side expectations of $850 million to $900 million in mobile ad revenue are a bit too high. That would be an increase from $656 million at the end of the second quarter and also higher than Wall Street’s consensus of $790 million.

They note that Facebook shares have risen 102% year to date and are up about 104% since the social network’s second quarter earnings report. The stock has greatly outperformed the NASDAQ, which has risen 9% during the same time frame. This shows just how high expectations for Facebook have become.

Sell-Side estimates for Facebook

On the other hand, they report that sell-side estimates for mobile ad revenue are between $799 million and $893 million, depending on whether there’s an upside to Facebook Inc (NASDAQ:FB)’s overall advertising revenue. Consensus is $790 million.

To get their own estimates for the company’s third quarter mobile advertising revenue, they combined consensus from both the buy-side and the sell-side, arriving at a range of between $800 million and $850 million.

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