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Facebook Inc. (FB:US) will start selling video advertisements with the first ads set to run on the social-networking site on Dec. 19, the Wall Street Journal reported, citing unidentified people familiar with the matter.
The ads will automatically play in Facebook users' news feeds, the newspaper said on its website. The social media company plans an announcement today and one of the first ads will be a made-for-Facebook trailer for the Lions Gate Entertainment Corp. (LGF:US) film "Divergent," according to the report.
The world's largest social-networking site plans to offer 15-second spots, two people familiar with the plans said in July. While the company already allows advertisers to upload videos to their Facebook page and then broadcast them to a user's news feed, the new service would let marketers buy their way directly into a person's feed, according to the people.
The move would follow efforts by Facebook's online rivals to capture ad dollars that have traditionally gone to TV networks. Google Inc. (GOOG:US) began funding original content channels on its YouTube video-sharing site in recent years, giving it a more curated venue for commercials. AOL Inc. operates HuffPost Live, a CNN-like video stream running five days a week.
Facebook members won't see a commercial more than three times in a given day, the people said. Depending on how large an audience an advertiser plans to reach, the ads will range in price from $1 million to about $2.5 million a day, according to the people.
Chief Executive Officer Mark Zuckerberg pushed back the start date for the video ads at least twice, wanting to make sure Facebook's user experience won't be tainted by the ads, according to the people. Zuckerberg wants high-definition video and easy-to-use playback features, the people said.
Facebook's move also would step up competition with social-networking rival Twitter Inc., which has been courting TV advertisers in its bid to reach $1 billion in sales by 2014.
Silicon Valley companies have had difficulty luring away ad dollars from television networks because of a lack of a single measurement system that compares TV audiences directly to Internet audiences. Figures from measurement companies such as ComScore Inc. are difficult to compare against ratings from Nielsen, the dominant firm for measuring TV ratings.
To contact the reporter on this story: Terje Langeland in Tokyo at tlangeland1@bloomberg.net
To contact the editor responsible for this story: Frank Longid at flongid@bloomberg.net
via Technology - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNFdXhykqTsoSIEs1jggaVZDhv0mHg&url=http://www.businessweek.com/news/2013-12-17/facebook-to-start-showing-video-ads-this-week-journal-reports
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