• by Mark Walsh  @markfwal, September 12, 2013

Mobile advertising will make up more than half of Facebook’s total ad revenue in the fourth quarter and climb to 60% by next year, according to a new forecast by JP Morgan analyst Doug Anmuth.

If those projections prove accurate, they would reflect the continuing dramatic shift of the social network’s ad business from the desktop to mobile devices. In the second quarter, mobile accounted for 41% of Facebook’s ad revenue, up from 31% from the prior quarter, and almost nothing at the start of last year.

Underlying that trend is the mobile migration of Facebook’s user base. As of the end of June, it had 819 million mobile monthly active users worldwide, up more than 50% from 543 million a year ago. In the U.S., Facebook ranked as the top mobile app in July, with 76.1% reach, and the second-largest mobile property behind Google, with 86.3% reach (mobile Web and app use combined), per comScore.

Anmuth raised his prior mobile revenue estimate by 3% to nearly $3 billion this year, and by 12% to almost $6 billion in 2014. “2Q13 marked an inflection point in advertiser demand and ad quality for Facebook, which enabled the company to increase inventory while simultaneously realizing higher pricing,” he wrote in a research note today.

JP Morgan was one of the underwriters of Facebook’s IPO last year.

In the current quarter, Anmuth indicates Facebook has also grown its advertiser base, adding new clients coming especially in the entertainment vertical across TV shows, movies and console games. Because these ads often include click-to-play video, he suggests this bodes well for the expected launch of video ads in the news feed in the coming months.

When it comes to Facebook Exchange (FBX), the report expects the re-targeting platform to become an increasingly important part of the social network’s ad offerings. Based on anecdotal evidence, FBX ads now often make up the majority of ads in the right-hand column on Facebook. And according to demand-side platform (DSP) Triggit, FBX ads in the desktop news feed are helping drive 27 times higher click-through rates.

The research note didn’t address any potential impact from the Federal Trade Commission on Wednesday saying it had begun an inquiry into whether Facebook violated its 2011 agreement with regulators in proposed new privacy policies rolled out two weeks ago.

Facebook’s stock closed at an all-time high of $45.04 on Wednesday.