The Guernsey player competed at a decent level against the in-form Ferro - in a match delayed by rain and played in damp conditions - but their contrasting results coming into the Grand Slam event in Paris appeared to prove decisive.
Ferro, 23, has climbed into the world's top 50 for the first time on the back of winning a clay-court title at the Palermo Open last month.
Trailing 2-0, she broke back in the third game and then in the seventh to claim a second main-draw win at her home Grand Slam.
Watson's defeat means it is the first time since the French Open in 2013 that there are no British representatives in the second round of a Grand Slam.
Former world number one Andy Murray, along with British number ones Johanna Konta and Dan Evans, lost on Sunday, while Cameron Norrie and Liam Broady followed suit on Monday.
And so for the first time since the French Open of 2013, no British singles players have survived the first round of a Grand Slam.
Each has an individual story to tell, but it has been a disappointing Grand Slam year.