Facebook's hotly-anticipated video ads are likely delayed yet again -- this time, until the fall.
Earlier this spring, the social network had been busily shopping the ads around to agencies, looking to secure commitments for a July launch. The pitch centered around TV-like reach, and the asking price was into seven figures to secure a day-long "slot" targeting huge demographic swaths, like all men or women between 18 and 34, or even all Facebook users in the U.S. who signed into the service on that particular day.
As of late last year, Facebook was prepping video ads for their debut in the first half of 2013, but the launch was pushed back to the summer. Now it's unofficially been pushed back until mid-October, according to a source familiar with the product. The given reason is that there are new features Facebook wants to release concurrently with video ads, and they require more software development.
But Facebook sales executives are keen to get the long-awaited product into market and are advocating for the product to be shipped as is and for new features to be added later, according to the source.
Another source familiar with the video ad product confirmed that the launch has been pushed back to early fall, at earliest.
In an interview with Ad Age, Facebook's VP-global marketing solutions Carolyn Everson declined to comment on the video ads or the intended timing of their debut.
While perfecting the product to ensure that it disrupts users as little as possible is critical for Facebook, there's some peril associated with pushing off the launch. First, the pricy ad units could generate significant revenue if the social network is successful in selling them, and a delay reduces the amount that Facebook can make from them this year. (The online video marketplace is also an increasingly lucrative one; eMarketer projects that advertisers will spend $4.09 billion on video ads this year and $5.68 billion in 2014.)
The minimum commitment for Facebook's video ad units when they were being shopped around for a summer launch was $1 million for a specific demographic swath. Facebook was asking as much as $2.4 million for an ad that would be seen by all U.S.-based Facebook users, according to a source.
However, it could be that concerns about user experience trump short-term revenue considerations.
"From a business perspective, Facebook would want to roll out this type of advertising more quickly, but they have to weigh that against how their users feel," said Debra Aho Williamson, principal analyst at eMarketer. "Facebook has to be really careful about not overweighting the news feed with advertising."
How Will They (Eventually) Work?
Based on how they were being positioned for the summer launch, video ads will appear to targeted users in their news feeds up to three times on the day they're slotted and will begin silently playing when a user scrolls over them, according to source who heard Facebook's pitch.
Audio won't be activated unless a user clicks on the 15-second ad, at which point it will restart and spread over the right- and left-hand rails of the page. Users can then scroll horizontally in the expanded interface and play up to two additional videos, which could be useful for storytelling for some advertisers.
While Facebook is looking to sell the inventory in demographic swaths, it's also planning to incorporate Nielsen metrics to provide an estimate of the reach in gross ratings points in order to entice TV buyers. The counting will include ads that haven't had audio activated, the source said.