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Facebook May Hijack Television’s Advertising Dollars

People pose with laptops in front of projection of Facebook logo in this picture illustration taken in Zenica

Video ads are likely to take Facebook by storm, with the number of companies using video advertising on the social media site rising steadily, according to Financial Times. The trend could result in advertising budgets with social media as a higher priority than television. Analysts predict that video advertising could raise Facebook’s revenue by $700 million to $1 billion in 2015.

Fidi Simo, Facebook’s product director, thinks companies will do several ads, some more generalized to reach a wider audience, with subsequent videos narrowing the focus to bring in consumers for specific merchandise. Kate Spade, for instance, has a video ad that allows viewers to click on images and make purchases.

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Advertisers are likely to spend $7.8 billion on video advertising in 2015, up one third from 2014, according to eMarketer. This is in line with the 75% increase in video posts per person, with no small debt to the ALS Ice Bucket Challenge over the summer, as people posted themselves pouring ice cold water over their heads to raise money for charity. The average Facebook user watched 3.6 times more video content, and Facebook is likely to attract advertising dollars that would have ordinarily be spent on television ads.

The reason the redirecting of advertising budgets from TV ads hasn’t happened sooner, is that Facebook aimed a bit high on its initial attempts. One advertising executive said Facebook, “came out swinging with this TV alternative that cost seven figures. The message was ill-received and very few guys got on board.”

Facebook may come out swinging again for advertising dollars, and this time, it might hit the ball out of television’s park.



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