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.

By Aimee Picchi Jul 31, 2013 2:51PM

Facebook logo (© Daniel Acker/Bloomberg via Getty Images)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.

More on moneyNOW

Tags: FBMedia
Jul 31, 2013 4:56PM
Guess I might have to go back to giving MySpace a try.  The last thing I want to do on facebook is have to watch a video ad everytime I log on!  They make plenty of revenue already off of their current ad platform.  I believe this will cost them users.
Jul 31, 2013 3:39PM
Yah! Facebook will not become even less user friendly. I wonder how this will work for the mobile version of the site (like youtube with mandatory full screen commercials?)
Jul 31, 2013 3:41PM
Next up.....Facebook searches for a new monetizing platform, perhaps the selling of your souls.
Jul 31, 2013 4:47PM
Glad to hear this, maybe TV will start making new quality shows with less advertizing.  Get rid of the NON-REALITY shows they pass off as Reality shows.  What will F-book do when people find a better social media to go to?  Time for all those who waste their time on F-book to find something better.  HA, HA,HA.
Jul 31, 2013 4:45PM
Ah Farcebook: you gotta love their b.s. attempts to generate income from a completely useless service.
Aug 2, 2013 2:49AM
15 seconds are not as short as it might sound. - However, it will improve my ability to block disturbances out. :-)
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