Facebook is set to challenge TV with ads
It's selling 15-second news feed video ads for $2.5 million, hoping to pry some money away from the tube.
Facebook (FB) has a new goal: stealing advertising dollars from the TV industry.
To that end, the social media giant is preparing to sell 15-second video ads that will appear in users' news feeds and cost marketers as much as $2.5 million each, Bloomberg reports. For Facebook users, that might mean seeing a particular video ad two or three times per day.
The plan to raid ad money from TV networks comes after Facebook touted the fact that its audience is bigger than that of prime-time TV. Of course, that's an increasingly lower hurdle to pass, given the long-time decline of network TV audiences.
But the fact remains that Facebook has a huge audience -- as many as 100 million people in the U.S. check in with the social media service during prime-time TV hours -- which may be enticing enough for marketers to switch allegiances.
Facebook will sell ads based on age and gender, traditional measures used by TV ad buyers, as a way to make marketers more comfortable with the idea, Bloomberg noted. Currently, the site sells ads by users' locations and interests.
Providing audience guarantees will be important for luring traditional advertisers, Subway Restaurants chief marketing officer Tony Pace tells MSN moneyNOW. He adds that the restaurant chain bought a video ad on Facebook in 2011.
"People in the Internet space are always trying the next whiz-bang idea, but we want that with a guarantee it'll reach the audience," Pace notes. Digital sites other than Facebook have approached the company with advertising platforms but without an audience guarantee, he adds. "We say, 'No thanks.'"
Facebook has been working with Nielsen, the audience ratings system that's the basis for TV ad sales, to count viewership in a way that matches TV ratings, Bloomberg notes.
The push from Facebook comes at a sensitive time for the TV industry, which is wrapping up advance ad sales for the 2013-14 season. The top networks are expected to book $800 million less than last year, partly because of weak ratings.
That's something that Facebook would probably "like."
Follow Aimee Picchi on Twitter at @aimeepicchi.
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