Facebook Inc. (NASDAQ:FB) announced on Wednesday that it has agreed to acquire LiveRail, an advertising technology firm that helps companies serve ads through videos on websites and apps.
Facebook is already showing video ads to its users, but the Menlo Park, California-based social networking giant wants to expand its footprint in video, including ads repurposed from TV.
Founded in 2007, LiveRail has worked with companies and organizations such as Major League Baseball, ABC Family, A&E Networks, Gannett and Dailymotion to provide and deliver targeted video ads. LiveRail’s technology combined with Facebook’s demographic data could be a potential gold mine for video advertisers in the near future.
“We believe that LiveRail, Facebook and the premium publishers it serves have an opportunity to make video ads better and more relevant for the hundreds of millions of people who watch digital video every month,” Facebook Vice President of Ad Product Marketing and Atlas Brian Boland said in a public statement.
According to CBS Corp.’s (NYSE:CBS) chief research officer, Dave Poltrack, CBS makes up to 20 percent more in ad revenue per streaming online viewer compared to ad revenue rates per television viewer. “We actually make more money per viewer streaming than we do on television,” Poltrack said Tuesday at the 2014 Media & Entertainment Industry Forum in New York.
While ad revenue rates per viewer are higher online, that is mainly due to the smaller online audience, which largely consists of younger viewers, a coveted but hard-to-target demographic. Television continues to hold the lion's share of ad dollars, expected to grow 3.3 percent in 2014 to $68.54 billion, according to a study by eMarketer. But online video ad dollars are quickly growing as well, with a forecasted 41.9 percent in 2014 to $5.96 billion, according to the same study.
“Publishers will benefit as well because more relevant ads will help them make the most out of every opportunity they have to show an ad,” Boland added.
Facebook earned $2.5 billion in revenue in the first quarter of 2014, up 72 percent from the same period in 2013.