Capitalizing on the high performance of video on Facebook, the social media platform is expected to start offering 15-second spots later this year.
Facebook Inc. (FB), seeking to break the long-held dominance of television over advertising budgets, plans to sell TV-style commercials on its site for as much as $2.5 million a day, two people familiar with the matter said.
The world’s largest social-networking site, which has 1.15 billion members, expects to start offering 15-second spots to advertisers later this year, according to the people, who asked not to be named because the plans aren’t public. Facebook rose above the $38 initial public offering price in early trading.
The move would follow efforts by Facebook’s online rivals to capture ad dollars that have traditionally gone to TV networks. Google Inc. (GOOG) began funding original content channels on its YouTube video-sharing site in recent years, giving it a more curated venue for commercials. A year ago, AOL Inc. (AOL) started HuffPost Live, a CNN-like video stream running five days a week.
With Facebook, the idea would be to capitalize on the millions of users who actively check the site on a daily basis, including during the prime-time hours coveted by television advertisers. As of last quarter, 61 percent of Facebook members were using the site daily — a number that has risen despite management predictions that it would decline.
“Every night, 88 million to 100 million people are actively using Facebook during prime-time TV hours in the United States alone,” Chief Operating Officer Sheryl Sandberg said last week on a conference call about second-quarter results.
Read more from the source: bloomberg.com