• by P.J. Bednarski , Staff Writer @pjbtweet, August 8, 2013

Facebook is hoping to become an enormous player in online video advertising, and it appears that Morgan Stanley is pretty sure they’re going to get there—fast.

Its analysts are saying Facebook’s video ads could generate $1 billion for Facebook next year (once they show up at all, maybe this fall), and $5.5 billion by 2019.  

The Morgan Stanley forecast, tipped on AllThingsD.com, are based on Morgan Stanley guesses derived from press reports about Facebook’s video entry, not information it has gotten from agencies or advertisers. So it should be taken with a few boxes of Morton salt, not just a few grains.

As AllThingsD points out, young people are great users of Facebook, not so much great users of traditional media like television, so it might be natural advertisers will follow them there.

What’s more, it seems to me, Facebook is a great second-screen destination for people who are watching television. Facebook ads coordinated to television schedules could be potent ad vehicles.

Last week, Facebook COO Sheryl Sandberg noted that 88 million to 100 million US viewers use Facebook during prime-time TV hours. And Nielsen released a Facebook-sponsored study that said Facebook’s daytime reach was at least as large as that of the Formerly Big Four Networks, among 25 to 34 year olds. So advertising on Facebook—it supposedly wants up to $2.5 million for ad units that runs all day long—could predictably reach several million hard to find viewers.

On other hand, Facebook users are grumbling lot the last couple years, it seems, and a wave of advertising where there once was none is the kind of action that could be greeted with great resentment, particularly when Facebook users recognize that unlike other ad-supported outlets, these ads aren’t helping defray the cost of any programming. Ostensibly, that’s the bargain we make with commercial-supported outlets.

On that third hand I keep around for times like these, I reject that second hand. It’s hard to destroy the habit of going to Facebook with a few commercials.     

In any event, Morgan Stanley concludes that however great Facebook might fare, YouTube should do better. It calculates YouTube will capture 17% of all US TV advertising by 2020, and Facebook will have “only” 5%.  

pj@mediapost.com