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Facebook rolls out video ads, takes aim at TV Networks

Matt Kapko | March 17, 2014
After months of testing, Facebook launched its premium video ad product yesterday. The opportunity for a massive windfall in new revenue helps explain why Facebook was so deliberate in testing the efficiency and reaction to the ads.

"Premium video ads are bought and measured in a way that's similar to how advertisers already buy and measure ads on TV," Susan Buckner, product manager at Facebook, writes in a blog post. "The ads are bought based on targeted gross rating points to reach a specific audience over a short period of time. Delivery is measured by an independent third party, Nielsen online campaign ratings (OCR), and advertisers only pay based on what Nielsen OCR measures."

Gross rating point is a metric used by advertisers to measure the size of an audience reached within a certain window of time. Facebook's video ads fall under that practice with deeper targeting capabilities that will enable advertisers to slice and dice the groups of users they reach with any particular campaign.

The auto-play video ads will reportedly cost anywhere from $1 million to $2.5 million per day, but Facebook hasn't confirmed those numbers. Shafer of SNL Kagan isn't making any projections about how much revenue Facebook stands to gain from video ad sales, but believes the company's mobile advertising product is a good benchmark.

Video Could Be Good (Very Good) to Facebook
Over the course of 18 months, Facebook went from zero revenue in mobile to a roughly $1.2 billion per quarter business today. "I can't see any reason that video ads wouldn't do at least that," says Shafer.

Facebook's meticulous approach to its video ad offering will go beyond the initial launch and execution. The company has tapped Ace Metrix to assist in reviewing all ads before they get the green light. "Ace Metrix will allow us to objectively measure the creative quality of the video in the Facebook environment, and highlight performance indicators for advertisers such as watchability, meaningfulness and emotional resonance," Buckner says.

In what she describes as a "limited introduction" with a "smaller number advertisers," Facebook will continue taking steps to ensure that video ads are high quality and delivering the best experience possible.

"They've taken a lot of pains to make it as painless as possible," Shafer adds. While Facebook can barely blink without getting negative reactions from at least some of its 1.2 billion users, there has yet to be any correlation with a drop-off in usage following the introduction of new ad products in the past.


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