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Facebook acquires LiveRail to boost video ad revenue

Facebook has completed the purchase of LiveRail, a tech startup that facilitates the placement of more targeted ads within online videos and apps.

The firm also provides a real-time bidding platform for marketers looking to place advertisements.

Read more: Mobile advertising helps boost Facebook revenue by 60%

The full terms of the deal have not been disclosed, but Facebook is believed to have paid somewhere between $400 million and $500 million (£233 million-£291 million).

The online video advertising market is forecasted to grow massively in the coming years, and marketers are placing increasing importance, not just on how many people see an ad, but how relevant the audience is.

"More relevant ads will be more interesting and engaging to people watching online video, and more effective for marketers too," Brian Boland, vice president of ads product marketing and atlas at Facebook, said in a blog post.

"Publishers will benefit as well, because more relevant ads will help them make the most out of every opportunity they have to show an ad."

LiveRail reportedly delivers over seven billion video ads each month and as an industry, more than £1 billion was spent on mobile ads in the UK alone last year, marking a rise of 93 per cent on the previous year.

Social networks, in particular, are well placed to capitalise on the growing market with their large user base. Facebook said recently that it would start serving ads to third-party mobile apps, while Twitter acquired MoPub last year, allowing marketers to manage their ad placements more efficiently.

Read more: Twitter acquires ad management service MoPub

The newly purchased LiveRail will compete alongside Google's AdMob and Apple's iAds platforms as firms look for an advantage in the competitive advertising market.

Smaller companies such as Millennial Media, Flurry and Nexage also promote their own version of "programmatic buying," allowing firms to focus their ads on a specific target audience.