As a big
company looking to increase revenue by utilizing the leverage of about 1.15
billion monthly active users and 699 million daily active users, Facebook is
looking at ways to include video ads in its News Feed.
According
to reports from the Wall Street Journal, it is estimated that video ads will
cost advertisers $2 million per day to reach every user but less for a section
of users.
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| Image: The Next Web |
Wall Street
Journal claims that according to the people in the know, Facebook CEO Mark
Zuckerberg has been delaying this feature because he doesn’t want to anger
users.
Meanwhile
the company needs to increase revenue generation, so Mark is trying to make the
effect on users’ experience as minimal as possible. It is reported that
extensive tests have been carried out to tweak the video ads so that it doesn’t
make the site slow. Effect on time spent on site has also been noted for
selected users that were tested.
The video
will be of 15 seconds in length or less. It will play at first to a user
without audio, an interested user will increase the volume which will make the
ad play over again. The video ads may also be in a slide of three video ads for
viewers. It is expected that only ad from an advertiser will be shown to a user
for a particular day.
Internet
companies are trying to exploit revenue from video ads that is currently
dominated by the TV companies. According to predictions, it is expected that TV
companies will earn about $66.4 billion from ads while internet companies will
only earn $4.1bn from video ads.
After the
announcement of $1.6bn revenue in the second quarter of 2013, a 61% increase
from Q2 in 2012, Facebook’s stock has increased by 45%.
Meanwhile
Morgan Stanley has predicted that Facebook could make as much as $1bn from
video ads in 2014 and up to $6.5 by 2020. It is expected that the video ads
will be a U. S. only feature for most of 2014.
Europe is
expected to join in late 2014, Asia in 2015 and the rest of the world’s markets
by the end of 2016. So if you’re in Nigeria, it could be as ‘early’ as 2016
before you witness it, not that it is necessary for your user experience
anyway.
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Facebook to introduce video ads in News Feed