Facebook, Other Social Platforms Attracting More Video Ads

Facebook is all set to attract more video advertising with the increase in the number of people preferring computers and smartphones to watch videos online. This indicates that social media companies are in no mood to let television take all the benefits of lucrative video ads.

Facebook, Other Social Platforms Attracting More Video Ads

Big brands are zeroing in on Facebook

Marketers are also keen to get their video ads on social platforms to promote their products and better pitch to probable customers using the data collected by these sites to generate consumer interests and characteristics.

Facebook has shown video ads of some of the biggest brands around the world, such as Nestle, Lionsgate, McDonald’s and Ford. Paul Verna, a senior research analyst at eMarketer, said these big names started with just talking about this idea and later deployed full-fledged ads to be played on Facebook. Versa said, “There’s kind of a perfect storm now of consumer behavior, technology, development and content availability.”

Companies like Facebook and Twitter are seeing big revenue growth with marketers estimated to spend $7.77 billion on digital video ads this year in the United States, an increase of 30% compared with 2014, according to eMarketer. However, it still stands as only a fraction of the $70.59 billion the research firm expects television to earn from advertising. However, eMarketer noted that digital video spending is growing much faster.

Narrowing the difference in advertising cost

Facebook is emerging as a dominant player in the video ad category. The social network started testing video ads in 2013 and recently hit 4 billion video views per day. More importantly, over 75% of the views on Facebook came from mobile devices. The company expects this number to rise in time as Chief Operating Officer Sheryl Sandberg, in a recent earnings call, said, “We expect more marketers to put mobile video at the heart of their campaigns in the future, and we’re well positioned to drive this shift.”

Though Facebook does not detail the revenue it makes from video ads, Cowen and Co. expects the social network to earn around $1 billion from them this year. Despite Facebook’s rising profile, YouTube is still a dominant name as well, accounting for 20% of U.S. video ad spending, according to eMarketer. Also Verizon, helped by AOL’s video content and unmatched technology, is the latest addition to the array of companies that are earning more video ad dollars.

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About the Author

Aman Jain
Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at [email protected]

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