Facebook reaches 1m advertisers, but hits pause on video ads
Facebook now has 1m companies and brands advertising on its platform – accounting for 85% of the company’s revenue – but despite this success unofficial reports suggest that the hotly-anticipated video advert feature, tipped for roll out in July, has been pushed back until October.
According to an article on AdAge, a “source familiar with the product” claims there are new features Facebook wants to release concurrently with video ads, requiring more software development.
Meanwhile, Mashable claims that the delay stems from slow uptake by advertisers. Facebook is allegedly trying to convince brands of the merits of the ad units, which will go for around $1m per advert reaching a specific demographic swath, and as much as $2.4m for an advert seen by all US-based Facebook users.
Clearly, this delay will prove expensive for the site, but its advertising revenue remains strong, growing 43% to $1.25bn in the first quarter of 2013.
It’s an area that Facebook needs to get right – eMarketer projects that advertisers will spend $4.09bn on video ads this year, and $5.68bn in 2014.
More than maths, though, the company needs to ensure the new ads don’t completely deter Facebook users already growing weary of its advertising. As Debra Aho Williamson, principal analyst at eMarketer tells AdAge: “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. Facebook has to be really careful about not overweighting the news feed with advertising.”