Facebook Wants to Charge $1 Million for Video Ads

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News Posted: Wed, Apr 17 2013 10:14 AM
There was a scene in The Social Network in which actors portraying Mark Zuckerberg, Eduardo Saverin, and Sean Parker were discussing how to monetize Facebook. The talk inevitably turned to ads, something Zuckerberg supposedly was adamant against implementing at the risk of Facebook losing it's cool factor. And then came the famous line delivered by Justin Timberlake (Sean Parker): "A million dollars isn't cool. you know what's cool?" "A billion dollars," Saverin finished as the camera turned to him retelling the story in a mediation room. Outside of Hollywood's dramatization, however, a million dollars is not only cool, it's what Facebook wants to charge advertisers to stream short video clips on the world's most popular social playground.

According to Ad Age, Zuckerberg and company want to stream four ads per day at $1 million per pop, earning the social networking site at least an additional $4 million every 24 hours, and perhaps more if it takes a cut on whatever the ads are selling. If successful, that would generate in the neighborhood of $1.5 billion in additional revenue per year.

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That's assuming advertisers are ultimately willing to pay the steep asking price. Facebook also risks running off members who may view the social networking site as too noisy already. The ads themselves would likely autoplay in a player that expands beyond the main news feed and would run for up to 15 seconds. No users would see more than three ads per day.

To add some perspective, the cost to air a 30-second ad during the most recent Super Bowl was $3.8 million, which reached an audience of 100 million viewers. Facebook is home to over 1 billion active users and it hopes to bring even more into the fold through its recently launched Facebook Home platform.
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Johnny3D replied on Wed, Apr 17 2013 10:43 AM

I suppose they can charge as much as they want for advertising space on their site. If I could charge a million dollars a day for something, I'd do it. Of course, I don't have anything I could charge a million dollars a day for... but if I did, I would.

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RWilliams replied on Wed, Apr 17 2013 2:31 PM

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I don't mind video ads, but rumor has it that these might be auto-playing ones. If that's the case, I'll be going to Facebook less and less.

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Clixxer replied on Wed, Apr 17 2013 3:04 PM

Maybe they are seeing the decline of facebook and need to make some quick cash which I doubt but would be funny. As long as they aren't autoplay I wouldn't care but like RWilliams said, id be on facebook less than I am if i had to endure that BS.

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dpstyner replied on Wed, Apr 17 2013 3:13 PM

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In my perspective, Ads on Facebook is really ineffective. I'm surprised that the demand for video ads even exist.

Some people suggest that by using facebook you can generate tremendous impressions (exposures). However, the impression itself would not be so effective as most people use Facebook as a medium for communication, they wouldn't necessarily use Facebook to shop for their goods.

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