Facebook Vies for a Chunk of TV Advertising Dollars

According to ZenithOptimedia, advertisers plan to spend almost twice as much on television as on digital media this year. Facebook hopes to change that by offering TV-style commercials on its site for as much as $2.5 million a day scalable by reach.

Earlier in the year, Facebook announced that it would be selling 15-second spots for $1 million a day or more. The original release of the video service was scheduled for July, but has been delayed until fall or maybe even next year.

When it does launch, the program will allow advertisers to target millions of active Facebook users based on age and gender on a full-day basis. Though marketers can now advertise through Facebook based on location and areas of interest, this new system will mimic the way television advertising is purchased i.e. fewer targeting options—yet another tactic to pull marketing dollars away from traditional television.

The most expensive Facebook video ad ($2.5 million) would reach all U.S. based users. To keep ads from saturating people’s feeds, no individual would see the commercial more than three times a day. In Q3, 61% of Facebook members were visiting the site daily with 88-100 million actively using the site during TV prime-time hours. Obviously, this is a huge draw for television advertisers.

Facebook is also partnering with Nielsen, a prominent media measurement firm, to find a way to count internet viewership similar to the way Nielsen measures television. In addition to the exposure gained by mass marketing online video through Facebook, advertisers will also be able to see who watched the ad, who interacted with the call to action, and the resulting sales.

Ultimately, Facebook wants to see more advertising dollars allocated to digital media. To accomplish this, the company has targeted agencies: “I’ve talked to some sources who have been pitched directly from Facebook at agencies,” says Rob Jewell, CEO of Spruce Media, whose Facebook ad buying clients include Procter & Gamble, Samsung and University of Phoenix. “Agencies also seem really excited about it. I think it’s because the problem with online video buying today is that there’s really no reach. You can’t get that TV-like reach online, and I think that’s what has held up those TV dollars from going online. You have to piece it together from lots of video sites with 5 or 10 million users here and there. The size [of Facebook] is appealing to agencies.”

Facebook will become a huge threat to television if agencies can access TV-sized target markets through online video advertising.

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