Bloomberg is reporting that Facebook is planning to introduce 15-second “TV-style commercials” to its News Feed later this year as a new revenue stream for its social networking service.
Facebook is said to be pitching the new ad format as an alternative to primetime TV spots, pointing out that millions of eyeballs are on the social network instead of television during those times. For a variety of reasons — including how “viewership” is measured — it’s been difficult to transition large marketing budgets from television to the web. By catering directly to TV advertisers in this way, Facebook clearly thinks it can tap a new source of revenue.
Facebook impressed investors last week with solid results for its second quarter. Mobile advertising in particular surged, rising to 41 percent of overall ad revenue, or $656 million, during the period.
Assuming the $2.5 million per day price is accurate, the new ads would create an immediate boost for Facebook’s bottom line. Considering that the company brought in $1.81 billion in revenue during the second quarter of 2013, a quarter worth of commercials at the highest price could hypothetically drive over 12 percent growth by adding as much as $225 million in revenue.
As of June 2013, Facebook had over 1.15 billion monthly active users, 819 of which are on mobile, and 699 million daily active users.