VIDEO: Commercials coming to Facebook news feeds

Published on Wednesday, 18 December 2013 11:12 - Written by

Facebook is betting the patience of some of its users against the hundreds of millions of dollars it could make on video advertisements. The company will place video ads into some news feeds — the stream of items on a Facebook page — starting this week. The ads, which Facebook announced Tuesday, will be visible to only a small subset of people. Nestled between photos of giggling babies and holiday dinners and other personal and public items on the site, the videos will start automatically, but without sound.

For Facebook, it is important that if its users don’t “like” the new ads, they will at least tolerate them, particularly when they appear on mobile devices. At the start of the year, Facebook was criticized for its slow response to the growth of mobile devices. Now, half of the company’s advertising revenue is derived from its mobile audience, which helped push the company’s share price up 100 percent over the last year, to fifty-four dollars a share.

The video ads, if poorly received, could risk that growth, but they also present a tremendous opportunity. Digital video advertising spending is expected to hit $4.15 billion by the end of this year, a 23 percent increase over last year, according to the market research company eMarketer. YouTube has the biggest slice of that spending, at about 20 percent.