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Facebook mulls offering TV style ads as share price hits new heights

BusinessNews
by Jamie Hinks, 31 Jul 2013News
Facebook mulls offering TV style ads as share price hits new heights

Facebook has hatched plans to sell on-site TV-style advertising for million of pounds per day as it celebrates its highest share price in over a year.

The planet’s largest social network, which has 1.15 billion members, is planning to lay siege on the television advertising industry by selling 15-second slots for up to $2.5 million [£1.6 million] per day, two sources familiar with the matter told Bloomberg.

Facebook will begin to offer the spots later this year, according to the anonymous sources, and it was something that COO Sheryl Sandberg hinted at during a Q2 results conference call last week.

“Every night, 88 million to 100 million people are actively using Facebook during prime-time TV hours in the United States alone,” Sandberg stated.

That prime-time TV audience is where Facebook is directing its crosshairs with TV advertisers likely to want to target users on the social network at this time of the day.

Prices, which will reportedly range between $1 million [£685,111] and $2.5 million [£1.6 million], will depend on the size of audience an advertiser wants to reach and users won’t see an advert more than three times in a day, the sources added.

Commercials are to be sold on the full-day basis mentioned before and advertisers are only allowed to target users based on age and gender.

Google and AOL have already attempted to capitalise on money that would traditionally have gone to TV networks through their respective YouTube original content channels and HuffPost Live channels.

Advertisers typically spend twice as much on TV advertising with ZenithOptimedia figures showing that TV advertising spending will hit $63.6 billion [£41.85 billion] this year with Internet ads projected to reach $36.2 billion [£23.8 billion].

Even better news for Facebook came as the social network’s share price closed at its highest level since their initial public offering (IPO) on May 18 2012.

The price rose 4.2 per cent to $35.43 [£23.32] at 16:00 in New York following optimism the company has turned the corner when it comes to generating sales from mobile advertising.

Youssef Squali, analyst at Cantor Fitzgerald, recommends buying the company’s shares and told Bloomberg that he “would feel a lot more comfortable owning the stock here” than when the social network held its IPO.

Facebook shares were sold to the public at $38 [£25.01] on the first day of trading and dropped as low as $17.73 [£11.67] in September due to niggling worries about the company’s ability to sell ads on portable devices.

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