In its own version of an upfront marketplace, Facebook is
currently selling four daily summer "slots," each targeting a
relatively large demographic: women over 30; women under 30; men
over 30; and men over 30. The ads will be capped at 15 seconds and
frequency capped to ensure that no user sees more than three per
day, with an asking price of upwards of $1 million, according to
Assuming four daily advertisers will meet Facebook's asking
price -- a big, and unlikely, if -- it would be earning more than
$4 million per day from the ads.
It's Facebook's version of a takeover, but with TV-like scale
and measurement. And it could be eagerly sought after by agencies
that have plenty of TV ad creative on their hands and not enough
TV-like web inventory to place it in.
"Aside from a YouTube front page or a Yahoo front page -- which
certainly isn't what it used to be -- this could be the answer,"
said a different executive, noting that the spending commitment
Facebook asked for was in the high six figures, verging on $1
million. Facebook declined to comment on the video ads or the price
The intention is to tap into deep TV budgets, but it represents
a significant change of course from last year when Facebook was
headed into its initial public offering. Executives from the social
network turned General Motors down
when the automaker's top marketing brass asked for larger,
higher-impact Facebook ads that would allow it to take over a page and
not be constrained to the right rail; GM subsequently quit Facebook
advertising in mid-May and only resumed last week.
In the intervening year, Facebook's major ad product launches
have been less about integrating its social graph and more about
taking advantage of its massive
scale through familiar web advertising models. (Its ad
exchange, FBX, is the most notable example.) The coming video ads
would seem to follow that trend, since they'll be shown to all
users who fit a broad demographic profile, not because of the
social context of a Facebook friendship with someone who's "liked"
the brand advertiser or movie studio showing the ad.
Though setting up an upfront marketplace to let agencies reserve
video inventory could help stir up demand for Facebook's video ads,
the current price tag is likely to be a barrier to entry, as well
as concerns about the backlash from users, according to one
Facebook declined to comment on the video ads.
Contributing: Michael Learmonth, Jason Del Rey