Facebook To Sell Video Ads On Behalf of Other Firms

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By Jack Marshall

Facebook Inc. is now selling video ads on behalf of other companies, a move that could prove lucrative for the
technology giant and intensify its competition with Alphabet Inc. subsidiary Google and other online ad specialists.

The company said on Monday it will help marketers sell and place « in-stream » and « in-article » video advertisements
across third-party websites and applications, including those operated by Daily Mail, Mashable and USA Today Sports
Media Group.

Digital publishers are now investing heavily in online video, lured in part by the relatively high prices marketers
are prepared to pay for video ads compared with other forms of online advertising.

Facebook said it hopes to help those companies extract revenue from that content more successfully. « We think there
are an awful lot of publishers looking for help monetizing their video, » said Brett Vogel, product marketing manager at

If widely used by publishers and media companies, the new video ad features could help Facebook compete for video
ad dollars with Google, in addition to advertising networks and technology companies that already help publishers sell
video ads.

Some publishers already have many touch points with Facebook — they rely on it to generate traffic for their
sites, and many post content on Instant Articles.

Much of the attention on Facebook centers on its core platform, the news feed, which gives it control over the
content that gets in front of users and which has turned into an engine of online ad growth. Its ad revenue jumped 57%
in the first quarter to $5.2 billion. Some 100 million hours of video are watched daily on Facebook feeds, according to
the company. Live videos were recently introduced.

But the company is also proving to be a heavyweight as an ad broker elsewhere on the Web — and that is an
increasing focus for the business. Facebook said fourth-quarter 2015 sales on its Audience Network, which includes
thousands of websites and apps, suggested an annualized run rate of $1 billion. (Facebook’s advertising revenue last
year was over $17 billion.)

Video could ratchet up revenue considerably, given how marketers are pouring money into it. Digital-video ad
spending in the U.S. is expected to grow 28.5% this year to $9.84 billion, according to eMarketer.

For their part, marketers will be able to target video ads across the Audience Network as they do on Facebook
itself, using the detailed information Facebook has about its users.

Advertisers will only be able to target video ads based on the audience they’re trying to reach; they won’t be able
to direct their ads to specific sites or types of content. Advertisers can opt to pay for video ads only when they are
viewed for at least 10 seconds. That option comes at a premium.

The « in-stream » ads themselves will be between 10 and 30 seconds long, Facebook said, and will appear before,
during, or after video content on publishers’ websites and apps, when viewed from mobile and desktop devices.

The in-article versions will appear between paragraphs on publishers’ pages, and will play automatically when at
least half of their pixels are viewable on users’ screens.

Viewers must tap to initiate sound, and the ads can be up to 20 minutes long.

Facebook’s Audience Network did offer some video capabilities previously, but only within mobile apps, and only for
direct-response advertisers who pay when users take a specific action such downloading a mobile app. The new ad formats
are geared toward brand advertisers, Mr. Vogel said, such as those who might typically advertise on TV.

Write to Jack Marshall at [email protected]

  (END) Dow Jones Newswires
  Copyright (c) 2016 Dow Jones  Company, Inc.

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