Television advertising has long been the realm of, well, television stations. Facebook Inc (NASDAQ:FB) is however looking to change that and join Google Inc (NASDAQ:GOOG) and AOL, Inc. (NYSE:AOL) in the competition for this market. With 1.2 billion users enjoying Facebook Inc (NASDAQ:FB) free of charge, Facebook Inc (NASDAQ:FB) feels that it can cash in on this by charging companies as much as $2.5 million dollars per day to air their 15 second spots according to two sources that contacted Bloomberg and asked to remain anonymous.
Google Inc (NASDAQ:GOOG) began funding original content channels on YouTube in order to have an arena for the offering of commercials. America Online added Huffington Post Live to its lineup which streams video Monday through Friday.
Facebook to cash in on users who view prime-time tv
Television advertisers covet those that watch prime-time television and Facebook Inc (NASDAQ:FB) has a number of users that view its site in that time frame.
"Every night, 88 million to 100 million people are actively using Facebook Inc (NASDAQ:FB) during prime-time TV hours in the United States alone,” Chief Operating Officer Sheryl Sandberg said last week on a conference call to discuss second-quarter results.
Advertisers plan to spend twice as much on tv as digital media
Advertisers plan to spend almost twice as much on television as on digital media this year, according to ZenithOptimedia, a research unit of Publicis Groupe SA. Internet ads are expected to reach $36.2 billion, or 22 percent of all media purchases, while TV advertising will garner $63.9 billion, or 38 percent. It's that nearly 64 billion that Facebook Inc (NASDAQ:FB) intends to target.
Twitter earlier this month expanded a service that markets direct promotions to viewers who tweet about shows they’re watching on television in a bid to finally reach $1 billion in ad sales.
Silicon valley has largely struggled to attract television advertisers due to a lack of a ratings system and sought out Neilsen three years ago in order to try to quantify its users based on the data they mine from its users. While companies like ComScore Inc. can measure the popularity of websites in relationship to each other, these numbers are not comparable to the Nielsen numbers that determine where advertising revenue is spent and what price is to be charged.
Facebook Inc (NASDAQ:FB) is hoping that through its partnership with Neilsen this will change and will allow it to target the nearly $70 billion that will be spent next year on television advertising.