NEW YORK ( TheStreet) -- Last week, in the middle of its IPO quiet period, Facebook Chief Operating Officer Sheryl Sandberg came to Madison Avenue to try and convince advertisers to think differently about ads on Facebook versus other places. Per its IPO filing, Facebook was able to sell $3 billion in ads last year. That's a lot. And if you talk to many people in online advertising, they will tell you that a lot of Facebook's ad gains came at the expense of display ad revenue running on traditional display vendors like Yahoo! ( YHOO) and AOL ( AOL). So there is a narrative that Facebook is trying to spin, which goes like this: We sold $3 billion in ads last year and we weren't even trying. We've got 845 million users and we're only going to sell more ads to more of them as time goes on. We're the shiny new thing in online ads (compared to Yahoo! and AOL). As time goes on, more and more offline ad spending will move online -- and we're going to get the lion's share of it. Think of us like a new kind of online network like Fox, CBS, NBC or ABC. Last week's splashy event tried to impart this message. As Peter Kafka said : Facebook is "selling the sellers, trying to convince them to send real money -- Google-sized money, or better yet, TV-sized money -- their way." So, Facebook talked about how it's going to start making money from mobile and rolling out new "premium" ads, which will include stuffing ads into your Facebook News-stream. You'll think you're clicking on some news that your friends have shared with you but -- surprise -- it will be an ad based on Facebook knowing what you like? Didn't that approach have problems for Google with Gmail? Maybe this time it's different for Facebook.
Facebook COO Sheryl Sandberg
Facebook even was "selling the sellers" in its recent S-1 filing for its IPO. Listen to this passage about its "advertising market opportunity": "Advertisers' objectives range from building long-term brand awareness to stimulating an immediate purchase. We offer advertising solutions that are designed to be engaging for users and personalized to users' demographics and interests in order to help advertisers better achieve their goals. Facebook's combination of reach, relevance, social context, and engagement gives advertisers enhanced opportunities to generate brand awareness and affiliation, while also creating new ways to generate near-term demand for their products from consumers likely to have purchase intent.
"According to an industry source, total worldwide advertising spending in 2010 was $588 billion emphasis mine . Our addressable market opportunity includes portions of many existing advertising markets, including the traditional offline branded advertising, online display advertising, online performance-based advertising, and mobile advertising markets.