Facebook poised to eat into TV advertising share with video-only platform

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A video-only advertising tab which is currently being tested by Facebook is likely to help the social network grab some additional ad expenditure from TV. That’s according to a report from Business Insider.

Indeed, TV advertising revenue still represents a large chunk across traditional media spending. In the US it came in at around $70bn in 2015. The four top networks, CBS, FOX, ABC, and NBC, are responsible for over half (58%) of that revenue. However, with the launch of YouTube and streaming services, TV advertising has begun to crumble. In addition, the younger generation already spends a considerable amount of time on mobile devices, hinting at further growth of the digital format.

Facebook jumps ahead of TV for ad revenue in 2016

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Source: businessinsider.com

However, TV advertisers are somewhat holding back in moving their budgets over to Facebook due to worries of high fragmentation and an interspersed news feed. This could be remedied by the Facebook video tab, which would be solely designed for video consumption. Here, users are able to discover new videos from pages, live videos as well as posts from friends.

Apparently, Facebook has been doing a test run of the feature for a few months now. Indeed, Mark Zuckerberg, CEO of Facebook, mentioned that testing for a “video home” had been running well at a recent earnings call.

The video tab presents a potential threat to TV and sites such as YouTube. Facebook’s video home would be similar to YouTube in offering the latest video content and perhaps even top rated channels.

The move into video from the social media giant has been inevitable. The company’s latest earnings revealed only small ad growth predictions for 2017. This means the firm has to step it up to keep investors happy. Add to that the fact that its video feature is doing well, with people now posting 75% more video content since 2015. Indeed, Facebook generates an average 8bn video views a day. According to Facebook research, its video ads reach an additional 5% of people who aren’t reachable on TV.

Mobile is now fast becoming a top target for advertisers and digital ad spend allocation. With video ads proving ever more successful, Facebook stands a good chance to grab a sizable slice of the market.