Facebook Inc Will Now Earn Money By Selling Third-Party Video Ads

Facebook is now selling video ads on behalf of other firms and will get an unspecified cut of the revenue, reports The Wall Street Journal. Such a move could prove profitable for the social media giant and puts it in direct competition with Google and other online ad specialists.

Facebook Inc Will Now Earn Money By Selling Third-Party Video Ads

Facebook to help marketers monetize their video

Facebook will assist marketers in selling and placing “in-stream” and “in-article” video advertisements across third-party applications and websites, including those operated by Mashable, USA Today Sports Media Group and the Daily Mail, said the social media giant on Monday. Advertisers can choose to pay for videos ads only when the ads are viewed for at least 10 seconds, but this option comes at a premium. The tech giant said “in-stream” ads will appear during, before or after video content on publishers’ apps and websites and will be between 10 and 30 seconds long when viewed from mobile and desktop devices.

Citing people familiar with the matter, The WSJ says the tech giant takes a roughly 30% share of revenue in its audience network and gives the rest to publishers. The social media giant sells display advertising as well in its audience network.

Publishers can also choose to include video ads alongside content on Instant Articles. The Instant Articles section is a place on Facebook where media companies publish articles directly rather than linking back to their sites.

Growing digital video ad spending to push up revenues

Digital publishers are lured in part by the relatively high prices marketers are ready to pay for videos in comparison with other forms of online advertising and thus are investing heavily in online video now. The social media company is hoping to assist those firms in extracting more revenue from that content.

Brett Vogel, product marketing manager at Facebook, said: “We think there are an awful lot of publishers looking for help monetizing their video.”

Given how marketers are spending money on videos, it could hike up revenue considerably for the companies involved. According to eMarketer, this year digital video ad spending in the U.S. is expected to increase 28.5% to $9.84 billion.

According to the social networking site, about 100 million hours of video are watched on feeds every day. Also Facebook recently introduced Live Videos. In the fourth quarter of 2015, sales on Facebook Audience Network, which includes thousands of apps and websites, suggested an annualized run rate of $1 billion, said the social media giant.

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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 amanjain@valuewalk.com

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