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Coming soon? Facebook video ads to test users August 16, 2013

Posted by rmshepard in Uncategorized.
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Facebook is exploring the idea of incorporating video ads into its service, and is starting to tout its potential to marketers. The social networking site reports that almost 100 million people use the service during prime time hours, as much as a typical audience for the Super Bowl. As Facebook sees it, here’s how the advertising will work. As described by Aaron Pressman of Yahoo News, users will see up to three mandatory 15 second ads per day, and advertisers will be charged up to $2.5 million per day (which will be more expensive per second than most television spots). Users may not be excited, though, and could protest. As Pressman stated, “People are flocking to social networks to see cute pictures and silly posts from friends and family, not to sit through ads for pickup trucks, allergy pills and fast food.” What could end up happening is yet another “Quit Facebook Day,” which has occasionally been successful in forcing the company to reconsider its new policies.

The recent news about Facebook’s latest move highlights an ongoing battle for advertising dollars normally spent on television. As television audiences become more fragmented, new platforms may offer a more attractive option of reaching target groups. With television in the United States receiving the largest share of money spent on advertising – 39 percent according to some reports – Facebook is likely to go all in despite the response from what will likely be a very vocal minority of its users.

For more on this story, see the following video:

Discussion Questions:

1.  Will Facebook users tolerate mandatory video ads? Could Facebook’s plan result in a major loss of users?

2.  How could Facebook’s new video ads challenge the television industry? How might a loss in profits, resulting from a loss in ad revenue, impact television as we know it? In other words, is television facing a similar crisis that newspapers faced when ads went online?

3.  How does Facebook benefit from video ads? How might this alter the company’s future?

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