Tuesday 27 August, 2013

Facebook Video Ads – Videos in Your News Feed

In the summer of 2013, it was reported that Facebook was getting ready to roll out its new video advertising plan. Ads would be 15 seconds long and added to users’ News Feeds. That’s half as long as a standard television commercial and longer than the video ads appearing at the beginning of YouTube videos, which usually run five or ten seconds.

At the time of writing this isn’t verified, but it has been reported that the videos will be silent. If you’re interested in a video and you click it, you can hear the sound.

The Shift to Online Advertising

The new advertising product is a bid to attract video ad spend from major brands, not small companies or internet marketers. The ads are expensive but intended to offer mass reach. Most social media advertising has been micro-targeted, which means that it takes advantage of profile information to offer highly targeted ads. Facebook’s Video Ads will give major brands reach to its 1.1 billion and counting users worldwide.

According to Nick Reid, managing director of TubeMogul UK, the scheme for purchasing ad spots appears to be designed to emulate TV advertising. Facebook offers its own version of the traditional model brands have used for decades to advertise on television. It seems to be trying to drive the shift from TV to online advertising by offering a model that big advertisers already understand.

Ads You Can’t Afford

Why don’t small brands or internet marketers take advantage of the video ad scheme as well? You can if you have a few million to throw around. Ads will cost between $1 and $2.5 million per 15 second ad. Author Richard L. Tso of advertising news site Adotas points out that this is more than a Super Bowl ad, which goes for about $4 million per 30-second spot.

It’s possible that Facebook will start offering other pricing plans for brands that want to target a specific demographic. Instead of having your ad seen by all 1.1 billion users, you can choose profile information to target. Hopefully these more targeted ads will have a lower price tag. But for now, clearly the selling point of Facebook Video Ads isn’t the site’s micro-targeting capabilities but its massive reach.

Will Facebook Video Ads Work?

At this point, no one knows with any certainty whether Facebook Video Ads will take off, but if ads in users’ News Feeds are any indication, the answer could be yes. News Feed ads have proven very profitable for marketers and brands that use them. Video Ads are expected to do well, too.

For Facebook, the results could be even better. Facebook Video Ads has already stirred interest among investors in the social media site. It is one of many bids to become profitable after the company went public. At the time of Video Ads’ announcement, Facebook was sitting on a surge in quarterly earnings, doing much better than expected.

Will Facebook’s 1.1 billion users be annoyed by the videos? The answer to that is also probably yes, but we’ll have to wait and see. The rollout is set for October 2013. Look at it this way – at least the ads will be silent until clicked (we hope).

Bob Steele

Bob Steele is an entrepreneur, software developer, marketer, and author living in the Denver metropolitan area. He’s an avid outdoorsman who loves skiing, hiking, fishing, boating, and just plain having fun. His interests include games, space, technology, physics, cooking (well eating actually), economics, business, internationalism, and team sports. With over thirty years of professional consulting experience, Bob has been exposed to many diverse business models and has gained a sensible approach to life. Bob’s company, WaveCentric is focused on commerce, marketing, and entertainment related products.

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