There is a new report from Ad Age that Facebook Inc (NASDAQ:FB) wants $1 million for every video advertisement on their website. The story apparently reports that the popular social media website hopes to charge advertisers a huge sum by the middle of the year.
The report, which cited one executive that was briefed on product, told Ad Age that such video ads could cost up to $1 million even though the videos would last no longer than fifteen seconds. The social media giant reportedly was in talks with three advertising agencies to see if there was any indicated interest available. They also wanted the advertisers to sign up for the first available slots that would open up in either June or July.
Although the company has yet to disclose details regarding the format, they did mention the possibility of placing the video ads in a dedicated player that would automatically play. The ads also could call the attention of users by expanding outside of the central news and into both the left and right side columns.
It should be noted that Facebook Inc (NASDAQ:FB) already has advertisements that are located on the sidebar but the ads don’t utilize auto-play nor do they expand to the outer columns. Such video ads will first appear on traditional computers before branching out to mobile devices.
Facebook Inc (NASDAQ:FB) hopes to sell four daily spots which means if everything goes as planned, they could earn $4 million everyday. Getting advertisers to agree to pay $1 million per ad will likely prove to be a tough task, most particularly because this format is a new idea. Most advertisers are not comfortable with spending a lot of money on something that may or may not be successful. Although Facebook has over 1 billion active users (as of January), it’s highly unlikely that the vast majority of users will respond to such ads to make the venture lucrative enough for advertisers.