Facebook Wants to Charge $1 Million for Video Ads

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.

Facebook Home

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.