Expected to launch this summer, Facebook’s new video ad units may be a huge profit for the company at an asking price of $1 million per ad. Facebook is hoping that video-ad units can be a more-than-$4-million daily business out of the gate (or 1 bilion per year) – not a low aim at all.
Without a doubt, expanding into mobile an donline video was only expected from Facebook who are currently in talks with various agencies to secure its first video ad partners. It has also been confirmed that there will only be a total of three video advertisements in users’ News Feeds each day as to not overwhelm the crowd.
Facebook plans to sell four ad spots per day, each of which will target specific demographics that include four categories: women over 30, women under 30, men over 30, and men under 30. The company is said to be capping video autoplay ads at 15 seconds, expanding from the main News Feed to cover the left and right columns on the desktop when an ad is played.
What does this mean for the advertising industry?
1. More video. Everywhere.
If you didn’t have enough evidence that video was increasingly becoming more important in the marketing mix, this is perfect evidence. Video has a 400% higher engagement rate compared to static content (Flimp.net).
It is said that a picture worth a thousand words and in that case, a video can be worth a thousand conversions since it is through a moving picture that is the most compelling way to share a story. Video is a preferred medium to text across all demographics and industries in unison. Specifically, online video is 5.33 times more effective than text and video is really one of the few strategies that works well regardless of the vertical.
2. Budgets transferring from traditional media to online (even more than before).
Facebook is aggressively trying to bring marketing budgets online, offering tempting targeting features and minimizing the need for traditional media in the mix. By offering video ad units, Facebook will attempt to capture the major TV ad budgets. Only time will tell if the industry will bite at the offered price tag; however, if it does, it’s almost certain that a user backlash will follow, stirring up the online video world.