Performance on mobile is of particular concern for Facebook as it works to allay investor worries that it has not moved quickly enough to monetize mobile traffic. The company showed a 54% increase year-over-year in mobile users in its Q1 2013 earnings, and mobile advertising accounted for roughly 30% of advertising revenue during the quarter. Yet, the company's stock price has been hovering under $30 since February.
According to people familiar with the plans, the new online Facebook video ads could yield up to $1.5 million in new revenue per day based on initial inventory levels. Big brands including Ford, Coca Cola and American Express are expected to participate in the early trials. It is unclear if Facebook is also approaching TV broadcasters and film studios to advertise their shows and films with the new ads, but based on recent studies, it would seem the social TV angle would be a sensible pitch.
News Feed ads would appear up to three times a day on a targeted user's page. The 15-second videos will play automatically when a user scrolls over them. Audio won't be activated unless a user clicks on the ad. Unless they are using a TV-recording service like TiVo, most traditional tube-watchers sit through commercial breaks. The Internet makes it easier to skip or ignore ads than television does, which could create some potential headaches for Facebook – even Google is changing its YouTube advertising system accordingly.