Bloomberg reported on Tuesday that Facebook is planning to sell space on the social network for advertisers to run 15 second video ads at a rate of $2.5 million a day. The news that won’t come as a surprise to anyone who’s been following the company’s recent advertising trajectory, but these ads could further bolster the company’s increasing revenue and prove that companies like Facebook and Twitter are serious competition for TV ad dollars.
The report comes on the heels of a strong quarterly earnings report from Facebook last week, when it showed important gains in advertising overall, and on mobile in particular. At $2.5 million per day, the video ads could give a nice bump to Facebook’s ad revenue, which was $1.60 billion in the second quarter.
The report said that the video ads on Facebook would be 15 seconds long, which is the typical length of ads produced for television (and also the exact length of a video on Instagram.) A Facebook representative declined to comment on the report.
This means advertisers wouldn’t have to dramatically change the content they would produce for Facebook, and they could run ads during primetime television events and capture the attention of users who are checking Facebook while watching television. On the last earnings call, COO Sheryl Sandberg said 88 million to 100 million people use Facebook during primetime TV hours each night.
Twitter has been doubling down on advertising around television recently, trying to capitalize on the real-time, chronological nature of its network in looking for ad dollars. Analysts have predicted that Twitter will make $1 billion in advertising revenue in 2014, but if Facebook starts cutting into that with video ads, the competition could get interesting. Companies still spend a lot of money on TV ads — it was the largest category for ad spends in the first quarter of this year, according to Nielson.
