First Facebook took over your web experience. Then it took over your phone. And now, more than a decade after the internet’s second-biggest advertising company (Google’s first) launched infamously in a Harvard dorm room, Facebook is all set to start delivering video ads on a whole new platform next week: your TV.
For the trial program, Facebook is partnering with A+E and Tubi TV to deliver ads accompanying videos displayed on those apps, when you watch them on your TV via a device like a Roku or Apple TV, Recode reports.
Facebook’s still not 100% sure exactly how this is going to work in the long run; details like the ideal ad length and preferred format haven’t been ironed out yet, Recode writes. But the general plan is there: using the Audience Network ad platform it developed a few years back, Facebook can attach ads to over the top video apps the same way it does to websites.
And now you may be thinking: but why? After all, in its most recent quarterly results (PDF), Facebook reported revenue of $18.8 billion in the year to date, of which $18.3 billion — about 97% — came from advertising. And isn’t TV on the way out?
Well, yes and no. As much as Facebook dominates in online advertising, there’s still big money to be had in television. Granted, not all TV spots are as lucrative as Super Bowl ads — for which CBS this year charged up to $5 million per 30-second spot — but they’re still work big money, even as they lose ground to digital.
At the end of 2015, a major analytics firm estimated that TV accounted for about 38.4% of the total ad market in 2015, and would continue to be around 38% of the market in 2016. That total ad market is worth more than $500 billion, so by that estimate the total TV slice works out to more than $190 billion — cash any mega-corporation would love to get its hands on.
There are many companies that could put ads on internet-delivered TV streams, of course. What Facebook brings is the promise of its hyper-targeted, personalized — and therefore, theoretically more effective — ad machine. Even if the device you’re using to stream media doesn’t have a Facebook app on it, big blue can still match you to an existing profile using other data. In this case, for now, it’s the IP address of the streaming device, which will be matched against Facebook accounts logging in from the same place. Doing so might not get you exactly — it could get your spouse, roommate, kid, or the neighbor leeching off your wifi — but it’s much closer still than standard TV advertising.
Another reason Facebook is targeting your TV? Facebook itself is just plain running out of room. It’s devoted as high a percentage of its screen real estate, both mobile and desktop, to advertising as it can and still have the user have a decent experience, the company CFO explained in this week’s investor call. Its revenue generation and ad sales capability won’t drop, but it is unlikely to keep growing as fast as it has been, just for that reason alone.
by Kate Cox via Consumerist