Facebook may be plotting to sell TV-style ads worth a whopping US$2.5m each per day

31 Jul 2013

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UPDATED: If reports are to be believed, it would appear that senior heads at Facebook are plotting to disrupt the TV-advertising space. According to reports circulating on the net today, the world’s largest social-networking platform is in the midst of plans to sell TV-style ads. And the price for one? A mere US$2.5m for a daily commercial.

Bloomberg has reported that two people “familiar” with the Facebook ad-gate matter, who do not wish to be named, said that Facebook is eyeing up selling “TV-style commercials” on its site for up to US$2.5m a day.

At the minute, Facebook has as much as 1.1bn members who network on its platform each month.

The mobile attack – keeping up

Last week, Facebook revealed its second quarter (Q2) financial results.

The results must have been reassuring for investors, as it would seem that Facebook is finally starting to get its head around the mobile explosion.

The financial figures revealed that 41pc of the social networking giant’s Q2 US$1.8bn revenue came from mobile devices.

For the second quarter, Facebook recorded a profit (GAAP) of US$333m, compared with a loss of US$157m in the same quarter for last year, just shortly after it went public in its IPO in May 2012.

"We’ve made good progress growing our community, deepening engagement and delivering strong financial results, especially on mobile," said Mark Zuckerberg, Facebook founder and CEO, last week.

Book-face: an open book on the web

The social network, which was started by Zuckerberg and an inner circle in a Harvard University dorm in Boston City in 2004, also gave a glimpse of its user base last week.

Apparently, there are, on average, 699m people on the social network every day, with monthly active users now encompassing 1.1bn people.

Last week’s Q2 results revealed that mobile active users (MAUs) stood at 819m, up 51pc year-on-year. On any given day, daily active users stood at 469m users on Facebook.

How will Google react?

How is Google going to react to today’s reports about Facebook and the TV-style ads?

In recent years, Google started funding original content channels on its YouTube video-sharing website.

Back to Facebook, however. According to Bloomberg, Facebook members will not be bombarded with the new ads, should they go live, more than three times a day.

Interestingly, a survey that was released last week by the London-based digital marketing agency Greenlight claimed that 15pc of Facebook users would pay for an ad-free service. This claim was based on surveys carried out with about 500 Facebook users from around the globe.

We will keep you informed of developments regarding the TV-style ads.

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Carmel was a long-time reporter with Siliconrepublic.com

editorial@siliconrepublic.com