December 17, 2013, 10:00 AM

Facebook starts selling video ads

The videos begin to play without sound when they appear onscreen. When a consumer clicks or taps a video, it takes up the full screen and the sound comes on. The move promises to raise Facebook’s revenue, an expert says.

Lead Photo

How a video looks on a smartphone.

After months of anticipation, Facebook Inc. announced today it is testing video ads that immediately start to play when they appear on users’ screens.

The videos initially play without sound. When a consumer clicks or taps the video, the video expands to take up the users’ full screen and the sound comes on. At the end of the video, a carousel of two additional videos appears, which gives marketers more opportunities to present content to consumers, Facebook says.

“Marketers will be able to use this new format to tell their stories to a large number of people on Facebook in a short amount of time—with high-quality sight, sound and motion,” states Facebook in a blog post. “This approach will continue to improve the quality of ads in the news feed.”  The news feed is the first page a user sees when logging on to the social network.

The move was widely expected. Facebook launched a test in September that examined how its users react to videos that play automatically on mobile devices. And its executives discussed the potential implications of self-playing videos during its third quarter earnings call.

“The addition of video content to the stream could be one of the most positive things that we have done in a long time for making it more engaging,” said Mark Zuckerberg, Facebook CEO, during the conference call. Sheryl Sandberg, the social network’s chief operating officer, also noted that video is a “very compelling way for marketers to tell their story.”

One reason Facebook is interested in video ads is that they are lucrative, says Rebecca Lieb, an analyst at The Altimeter Group. While Facebook hasn’t said how much it will charge for video ads, some estimates suggest the price tag might be $2 million a day to reach all U.S. Facebook users between the ages of 18 to 54.  “Video ads do, of course, command higher revenues than other ad formats,” Lieb  says.

Videos are also extremely appealing to advertisers, says Nate Elliot, vice president, principal analyst at Forrester Research Inc. "Marketers love video, and will spend $3.6 billion on online video ads in the U.S. this year," he says. "And now Facebook will rival YouTube as a source of online video ad reach. We'll be watching to see how far and how quickly Facebook pushes these ads. The company hasn't always been smart about testing new ad formats and rolling them out slowly, but that'll be important here to avoid compromising both the user experience and the video ads' effectiveness."

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