Brands hoping to test Facebook's long-awaited video ads will have to wait a while longer. Facebook has pushed back its intended October unveiling, and hasn't provided a new launch timeframe, according to three people with knowledge of the matter.
Facebook Pushes Back Video Ad Launch Again Amid User Experience Concerns
Facebook has been pitching brands and agencies on video ads for more than a year. The pricey, 15-second spots will be targeted at demographic segments of Facebook's userbase (not unlike TV) and Facebook is seeking anywhere from $1 million to roughly $2.4 million depending on the reach involved for a daily slot. They first were slated to be unveiled in the first half of this year, then were being teed up for a summer debut, and most recently pushed back to October.
The latest delay could be a setback for marketers that had planned to use the video ads as part of Black Friday promotions which come the day after Thanksgiving and mark the beginning of the holiday retail season. Company representatives have been non-committal about whether the unit will be ready in time.
Not just TV
The biggest concern still delaying the launch is the impact on user experience. While Facebook will accept some TV spots for video ads, they're urging brands to create new spots specifically for Facebook that are more social in nature and take advantage of the platform. In addition, the company is setting up an internal creative review process intended to keep the quality of the ads high, but its unclear to those briefed so far how, exactly, it will work.
Facebook declined to comment on video ads.
The video ads will appear to U.S. users in their desktop and mobile news feeds up to three times on the day they're slotted and will begin silently playing when a user scrolls over them. Audio won't be activated unless a user clicks on the 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.
Video ads are Facebook's bid to tap into TV budgets, and the payoff for getting the product right could be considerable. Per a projection by eMarketer, advertisers will spend $4.1 billion on video ads this year and $5.7 billion in 2014.
While Facebook had secured commitments for an October launch, according to someone with knowledge of the deals, many brands and agencies continued to be gun-shy on account of the million-dollar minimums for an unproven product. Akin to how Apple came to market with iAd, Facebook isn't budging from its high price tag and is imposing guidelines for how it expects the creative to look. (Apple slashed the price considerably in the years after the 2010 launch.)
Others said they'd rather wait and see how they're received by users before they commit.
"It seems that every new ad unit within Facebook has some level of backlash from the user base for the first month," one person said. "We're hesitant to be first in the space for that reason."
And there are also production costs to consider. Because Facebook is exercising creative oversight, the potential need for a substantial production investment could make video ads "doubly cost prohibitive," according to an executive briefed on Facebook's production standards.
But some brands are becoming more adept at making cheap web content, said Digitas's VP-social marketing Alex Jacobs, so that's not quite the barrier than it might have been when they were mostly making expensive TV spots.
"It's not as though Facebook is demanding that brands make custom TV-level-quality spots for their platform," he said.
It's taking Facebook a long time to get these ads off the ground but that doesn't mean they won't be profitable down the road. The news feed and mobile ads now now driving Facebook's revenue growth were only launched in January 2012 and February 2012 respectively after long periods of speculation about how the social network intended to make money from them.