Facebook Inc. (FB) said it would begin selling video advertisements later this week, a move that may help the social-networking giant capture a share of the annual $66.4 billion TV advertising market.
The ads will start appearing Thursday both on the Web and on smartphones, according to people familiar with the matter. They will play automatically in users' news feeds—though the sound will be off, Facebook said Tuesday.
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How long they will be is unknown. In August, The Wall Street Journal reported Facebook planned to offer ads of up to 15 seconds on both smartphones and the Web.
One of the first ads will be a short teaser—made specifically for Facebook—for the coming Lions Gate Entertainment Corp. (LGF) film "Divergent." It isn't known how many other companies will offer ads in the early days.
Many advertisers had hoped Facebook would begin selling ads in time for the holiday shopping season but Facebook delayed a launch fearing ads could annoy users.
Some advertisers produced videos early in the year, anticipating a summer rollout, and were frustrated when Facebook pushed back the launch. Other advertisers worried ads might alienate users.
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Facebook founder and Chief Executive Mark Zuckerberg took a personal interest in the video ads and delayed their introduction in part because of engineering problems that made them slow to load. In August, the Journal reported Facebook software engineers improved the back-end technology to speed up ads.
Last week, some Facebook users saw videos playing automatically in news feed as Facebook began to test the technology.
Facebook said video ads playing on mobile devices would have been downloaded in advance when the device was connected to WiFi—meaning this content won't consume users' data plans.
It isn't clear how much Facebook will charge advertisers but it is likely to be expensive. "We do not disclose pricing," Facebook said in a statement Tuesday. "The goal for this test feature is to be a premium advertising format on Facebook, intended to reach a large audience at specific times."
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Executives told The Wall Street Journal in August Facebook planned to charge $2 million a day to let advertisers reach the full Facebook audience of adults aged 18 to 54.
"We expect video to be more expensive," said Dan Slagen, senior vice president of marketing for Nanigans, a digital-marketing software company. "But we're going to see advertisers willing to pay," he said on Monday.
Data-research firm eMarketer expects advertisers to spend $66.4 billion on television in 2013.
The delayed rollout could prove profitable for Facebook because this time of year advertisers can have excess money to spend. Traditionally, Facebook hasn't been a go-to place for that money and video ads will make it a more attractive destination, advertising industry experts said.
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