Facebook Inc (NASDAQ:FB), for all of its foibles in the year-plus since it went public, has been commended for its efforts in monetizing its social network. Advertising has been a constant challenge, and especially with the exponential growth of mobile over the last couple years. Facebook has started making some headway in advertising with its Facebook Exchange ad system, and it has been working hard to develop its advertising presence on mobile devices without being too intrusive on the small screens.
Earlier this year, Facebook Inc (NASDAQ:FB) made public its latest advertising idea, but it is apparently facing yet another delay. Facebook started selling its video-advertising concept with partners late last year, pushing 15-second video ads for at least $1 million each to be broadcast to a certain swath of Facebook users if certain "slots" are bought during the day. The initial idea was to begin rolling out these new video ads in users' news feeds this spring, but then that got pushed back to the summer.
Now, with Facebook currently working on some new features that it would like to add to the videos, continued development of the software could delay the rollout until sometime in the fall, according to a couple of reportedly high-placed sources. There is a debate as to whether the ads could roll out as they are now and have the new features added later as a software update. But apparently the winning argument right now is to roll the videos out with the features concurrently to enhance the value proposition for partners.
Talk is that these video ads, which will run with no audio in a user's news feed unless the user opts to turn on audio, in which case the video would then restart at the beginning and expand across the width of the news feed, could run advertisers as much as $2.5 million for one 15-second spot, based on the intended demographic of the Facebook Inc (NASDAQ:FB) audience. But is there a user experience metric to be considered here?
While this could be a hefty source of revenue for Facebook Inc (NASDAQ:FB) - after all, it is estimated that companies will spend more than $4 billion on video advertising this year and $5.5 billion next year - there are those in the advertising business who caution about Facebook getting overzealous with vids, as they are the easiest to distract and adversely affect user's experiences compared to text ads or those with photos.