Facebook Inc. FB -0.95 % is now selling video ads on behalf of other companies, a move that could prove lucrative for the technology giant and intensify its competition with Alphabet Inc. GOOGL 0.75 % subsidiary Google and other online ad specialists.
The company said on Monday it will help marketers sell and place “in-stream” and “in-article” video advertisements across third-party websites and applications, including those operated by Daily Mail, Mashable and USA Today Sports Media Group.
Facebook will get an unspecified cut of the revenue. Typically, the company takes a roughly 30% share of revenue in its audience network—where it also sells display advertising—and gives the rest to publishers, according to people familiar with the matter. Publishers can also opt to include the video ads alongside content on Facebook’s Instant Articles feature, where media companies publish articles instead of linking back to their sites.
Digital publishers are now investing heavily in online video, lured in part by the relatively high prices marketers are prepared to pay for video ads compared with other forms of online advertising.
Facebook said it hopes to help those companies extract revenue from that content more successfully. “We think there are an awful lot of publishers looking for help monetizing their video,” said Brett Vogel, product marketing manager at Facebook.
If widely used by publishers and media companies, the new video ad features could help Facebook compete for video ad dollars with Google, in addition to advertising networks and technology companies that already help publishers sell video ads.
Some publishers already have many touch points with Facebook—they rely on it to generate traffic for their sites, and many post content on Instant Articles.
Much of the attention on Facebook centers on its core platform, the news feed, which gives it control over the content that gets in front of users and which has turned into an engine of online ad growth. Its ad revenue jumped 57% in the first quarter to $5.2 billion. Some 100 million hours of video are watched daily on Facebook feeds, according to the company. Live videos were recently introduced.
But the company is also proving to be a heavyweight as an ad broker elsewhere on the Web—and that is an increasing focus for the business. Facebook said fourth-quarter 2015 sales on its Audience Network, which includes thousands of websites and apps, suggested an annualized run rate of $1 billion. (Facebook’s advertising revenue last year was over $17 billion.)
Video could ratchet up revenue considerably, given how marketers are pouring money into it. Digital-video ad spending in the U.S. is expected to grow 28.5% this year to $9.84 billion, according to eMarketer.
For their part, marketers will be able to target video ads across the Audience Network as they do on Facebook itself, using the detailed information Facebook has about its users.
Advertisers will only be able to target video ads based on the audience they’re trying to reach; they won’t be able to direct their ads to specific sites or types of content. Advertisers can opt to pay for video ads only when they are viewed for at least 10 seconds. That option comes at a premium.
The “in-stream” ads themselves will be between 10 and 30 seconds long, Facebook said, and will appear before, during, or after video content on publishers’ websites and apps, when viewed from mobile and desktop devices.
The in-article versions will appear between paragraphs on publishers’ pages, and will play automatically when at least half of their pixels are viewable on users’ screens.
Viewers must tap to initiate sound, and the ads can be up to 20 minutes long.
Facebook’s Audience Network did offer some video capabilities previously, but only within mobile apps, and only for direct-response advertisers who pay when users take a specific action such downloading a mobile app. The new ad formats are geared toward brand advertisers, Mr. Vogel said, such as those who might typically advertise on TV.
Write to Jack Marshall at Jack.Marshall@wsj.com
Corrections & Amplifications:
Companies that purchase video ads through Facebook’s Audience Network can opt to pay for the ads only when they are viewed for at least 10 seconds. That option comes at a premium. An earlier version of this article incorrectly said advertisers will only be charged for ads viewed for at least 10 seconds.
Our editors found this article on this site using Google and regenerated it for our readers.
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