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August 9, 2013

Facebook Expected to Rake in $1 Billion From Video Ads in 2014

In a move that may deter some of its users, Facebook is planning to add video advertisements to its site.

While consumers may not be pleased about the decision, a new report released by Morgan Stanley predicts the ads will be wildly successful in 2014, generating an estimated $1 billion. By the year 2020, claims the report, Facebook could be raking in as much as $6.5 billion per year.

Reports circulating around the Internet suggest Facebook will roll out its video ads later this year, but only in the U.S.

European Facebook users won’t see the ads until late 2014, with Asia close behind in 2015 and the rest of the Facebook market in 2016.

As reported by Mashable, early reports of how the ads will impact the usage of Facebook suggest the 15-second clips will play first without sound. If the user switches on the sound, the clip will play from the beginning. Finally, if the user isn’t interested in what the ad has to offer, he or she can simply scroll past it.

It isn’t clear yet how users will react to the ads once they’re implemented, but some have already expressed concerns – namely Smartphone users who worry the ads will waste bandwidth on their data plans.

“This is a horrible idea, it will chew through my mobile data allocation,” said one user commenting on Mashable’s report. “If facebook does this I am leaving, the data costs will kill me.”

Facebook isn’t the first – and won’t be the last – social media website to integrate video ads. YouTube is already playing ads on its site, which, says Mashable, is expected to generate $4 billion within the next year.

 

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