Facebook Implementing Video Ads May Pose Threat to Networks

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Back some twenty years ago, competition for the advertising dollar wasn’t as fierce as today’s. Why? The internet and particularly social media platforms have scooped up a piece of the pie that used to be exclusive to television networks. These networks may start feeling the heat after Facebook announced today that they will begin implementing video ads to their website, which ultimately may pose problems these television outlets.

On Facebook’s official blog it stated that it will allow a specific number of marketers to utilize 15-second video ads in the upcoming months. This is a continuation of the social network’s growth in terms of obtaining high-end video production budgets.

This is not necessarily a new development for the social media giant though. For months, they have been testing the utilization of television ads; however, with several months of beta testing they are now expanding the usage of these commercials.

The thought on Facebook’s end is that these profitable video ads will only increase their stake in the market. With that increase, it is a great cause for concern for the networks in now having to compete against the largest social media platform in the world. As a result, they are now having to compete with Facebook for highly profitable advertising dollars — money that helps keep these networks in business.

Unfortunately for the television industry, advertisements are getting seen less and less by viewers. There are several reasons for this, but the first has to do with the advent of mobile devices, people are looking down during live television instead of paying attention to ads. Secondly, with many watchers having Tivo, several of these commercials which air during recorded shows  will never be watched.

Advertising on the internet isn’t as easy to escape. This threat is something most networks realize, and by Facebook implementing these video ads to increase traffic, it may pose a significant revenue change for both sides.

The reason for not being able to escape this phenomenon is that most videos that are seen on the internet tend to have mandatory commercials that the average viewer cannot skip, unlike Tivo. People have no choice with the exception of browsing another site for 30 seconds or fiddling with their phone. However, unlike traditional video commercials, this is less likely to occur thanks to commercials being shorter and not being a group of them.

One thing Facebook has stated that they don’t want to do with their increase of video commercials is annoy the consumer. Many sites on the web, Youtube and Hulu especially, have obtrusive ads that are loud and in your face. Much like many of the new video content on Facebook, these videos will automatically play; however, they will be muted unless the viewer wants to take a listen.

There is a huge attraction for advertisers to utilize their commercials on Facebook. The major advantage most see is that as a result of watching a commercial, a user can immediately go to the website. While a user could do the same if their laptop or phone is nearby, it requires more effort.

Additionally, advertisers are looking for ways to broaden their reach. By utilizing companies like Facebook and Twitter, they know if their ad is strong enough it could go viral and lead to an unlimited amount of sales. The television networks cannot easily promote products by word of mouth, which is why Facebook’s new ideology by implementing these video ads may pose significant threat to the advertising market.

By Simon Mounsey

Reuters

Variety

Invisia

The Motley Fool

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