Facebook to incorporate TV-style ads into our News Feeds

By on July 31, 2013, 8:30 AM
facebook, tv, advertising, social media, feeds

Television advertisements reel in the big money, and Facebook now has plans to tap this lucrative business. The company intends to incorporate TV-style commercials into its social networking website, which will reportedly retail between $1 and $2.5 million per day, say two sources familiar with the matter.

According to Bloomberg, the initiative has largely been driven by the emergence of online video channels. In recent years, YouTube has begun to intersperse short commercials between their regular content. Mass media corporations such as AOL have also attempted to enter this growing market, releasing a CNN-like video streaming service by the name of HuffPost Live.

There’s no denying that placing targeted commercials into its members’ News Feeds will spike revenues; however, the California-based company doesn’t want to be overly obtrusive, either. CEO Mark Zuckerberg, said, “One of the things I watch most closely is the quality of our ads and people’s sentiment around them. We haven’t measured a meaningful drop in satisfaction.”

The commercials will be approximately 15 seconds in length, which is comparable to the Instagram videos that most of us have grown accustomed to. The ads will make up just 5% of a person’s News Feed, which works out to be exactly one in 20 conventional wall posts, photo uploads, or status updates. And much like traditional TV ads, the commercials will be targeted using only age and gender information; parameters such as location and personal interests will be disregarded.

Perhaps the greatest part of the upcoming ad service is that members won’t see a commercial more than three times in a single day. Although advertising is never welcomed by the general public, and this news is certainly nothing to rejoice about, at least Facebook is making some kind of effort to protect the user experience. Investors have adopted a similar viewpoint, seeing as Facebook share prices rose to $37.63 on Tuesday, its highest price since May of 2012 - the same month of the company's $38 IPO.

User Comments: 8

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MilwaukeeMike said:

That'll be annoying, but they have to do something. FB doesn't make much money compared to other big tech companies, and they've actually lost money 2 out of the last 4 quarters.

1 person liked this | tipstir tipstir, TS Ambassador, said:

Too much adverts on FB, but they have to make money as they don't have you join for a membership fee and it's pretty much open social network idea. Youtube has video ads before any video plays, you do have the option to skip the ads. To much in your face ads will keep some members away.

Tekkaraiden Tekkaraiden said:

I've never understood their business model or understood why they are worth so much.

They have no products or services and pretty much survive just on ad revenue.

LukeDJ LukeDJ said:

I've never understood their business model or understood why they are worth so much.

They have no products or services and pretty much survive just on ad revenue.

Well, every form of media ever basically runs on this model. Companies are willing to pay a lot of cash to get their product plastered on our screens :P

MilwaukeeMike said:

I've never understood their business model or understood why they are worth so much.

They have no products or services and pretty much survive just on ad revenue.

you're not alone... when Facebook went public there was some talk about how it was going to be huge and people were going to make tons of money. When it happened their price went up to around $45 and then went down and stayed down. Compare that to companies like Amazon, Google, Apple etc who have stock prices in $300-$400 range.

The reason people thought FB was going to be huge was because not only to they have like a billion users, but they have personal info on all their users. Any website that gets as much action as FB is a winning lottery ticket waiting to be cashed in. The problem is people don't want their info used as a means to focus advertising, so FB has been stuck with this goldmine of information with no way to use it. Hence the low stock price and profits that barely make ends meet.

They're slowly finding ways to push ads to their users, and it wouldn't surprise me if one day they even offered a version of FB completely ad free for a small fee of like $3/month.

alcarin2030 alcarin2030 said:

People still see ads on the internet? Odd.

Ranger1st Ranger1st said:

FB is going to profit themselves out of a client base, Greedy window lickers.

Skidmarksdeluxe Skidmarksdeluxe said:

It's hardly surpising. 99% of FB's income is generated from ad's hence it's service remains free to users. It can't be a bad deal if your'e a FB user.

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