Facebook to Start Showing Video Ads This Week, Journal Reports
Facebook Inc. (FB) is testing video advertisements that automatically play in users news feeds, seeking to catch up with other websites offering short commercials online.
The first promotions are starting to run this week, the company said in a statement today. One of the first clips will be a trailer for the Lions Gate Entertainment Corp. (LGF) film Divergent, video posted on Facebooks website shows.
The worlds largest social-networking service plans to offer 15-second spots, two people familiar with the plans said in July. While the company already allows advertisers to upload videos to their Facebook page and then broadcast them to a users news feed, the new service would let marketers buy their way directly into a persons feed, according to the people.
Facebook is focusing on trying to get parity with what other websites offer, said Nate Elliott, an analyst at Forrester Research Inc. in Cambridge, Massachusetts. If were just talking about 15-second auto-start video ads, YouTube has been offering them for five years now. Yahoo has been offering them for a decade.
The move follows efforts by Facebooks rivals to capture ad dollars that have traditionally gone to TV networks. Google Inc. (GOOG) began funding original content channels on its YouTube video-sharing website in recent years, giving it a more curated venue for commercials.
AOL Inc. operates HuffPost Live, a CNN-like video stream running five days a week. Marketers are expected to spend $3.6 billion on online video ads this year, according to Forrester Research.
Well continue to refine this new way for brands to tell stories on Facebook to ensure the best experience for people and marketers, Facebook said in the statement.
Facebook members wont see a commercial more than three times in a given day, the people said. Depending on how large an audience an advertiser plans to reach, the ads will range in price from $1 million to about $2.5 million a day, according to the people.
Chief Executive Officer Mark Zuckerberg pushed back the start date for the video ads at least twice, wanting to make sure Facebooks user experience wont be tainted by the ads, according to the people. Zuckerberg wants high-definition video and easy-to-use playback features, the people said.
Facebooks move also would step up competition with social-networking rival Twitter Inc. (TWTR), which has been courting TV advertisers in its bid to reach $1 billion in sales by 2014.
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Facebook to Start Showing Video Ads This Week, Journal Reports