Facebook is to tap another advertising medium later this year with the introduction of video advertisements, according to a report from Bloomberg.
The ads, placed in users’ newsfeeds in the same way as text ads, will be no longer than 15 seconds in duration, similar in length of a short TV ad or a video from Instagram. Ads will be placed at a ratio of one per 20 updates.
Advertisers will be charged on a per-day basis priced at between $1 million and $2.5 million.
Facebook has yet to confirm the plans which, Bloomberg said, were revealed to it by "people famliar with the matter". It’s not clear which companies will be availing of video just yet but it is understood Facebook will be looking to compete with television networks, especially as more 18-24-year-olds in the US are using the social network during primetime viewing hours than watch TV.
The news has met with approval from the markets, with shares in Facebook going beyond its IPO price of $38 for the first time.
At present, Facebook has 1.15 billion users, 699 million of which are considered daily active users. Its second quarter earnings of $1.81 billion indicated significant progress had been made in monetising the service, in particular in mobile, which accounted for 41% of advertising revenue.
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