updated 10:31 am EDT, Tue April 16, 2013
New video ad spots could earn Facebook $4 million per day
Facebook may add video advertisements to the news feeds of its users, in order to supplement its income from its existing advertising system, according to a report. The social network is in talks with a number of agencies to fill as many as four ad-spots, and is planning to play as many as three video spots per day to its users.
The final format of the video ads have yet to be finalized by Facebook, according to AdAge, but it is believed that the videos will automatically play, and will be shown in a video player on the left and right-hand sides of the feed. Though the desktop versions are set to have video, the mobile apps are being worked on to have their own video advertisements, if not at the same time as the normal browser version.
Executives of ad agencies speaking anonymously claimed that the videos will be capped at 15 seconds and will have an asking price of around $1 million per spot per day, with the new ads starting in June or July. If all spots are taken, this would net Facebook $4 million in revenue every day.
Large-scale advertising has been an issue for Facebook for a long period of time. Though the video ads may draw advertisers used to paying for TV spots, partly from its use of fairly broad demographics, it is unknown if it will encourage other advertising on the social network. Pitching efforts last year led to General Motors ceasing its paid advertising on Facebook, after GM found its paid ads unimpressive compared to the price.