Facebook Acquires Video Advertising Start-Up LiveRail

They Know What Users Want, Now To Sell It To Them

Facebook has acquired LiveRail, a start-up which develops ways for companies to focus video ads on their sites more directly to consumers. As the largest platform for the publishing of video adverts across a variety of sites, delivering over seven billion targeted video ads every month, the purchase of LiveRail marks a definitive move on Facebook’s part to further monetise the growing capacity of mobile devices in particular to integrate video into users’ News Feeds.

Source: mashable.com

The social networking site first trialled auto-playing ads at the end of 2013, and auto-playing videos were introduced into all users’ News Feeds in March of this year. This acquisition demonstrates Facebook’s commitment to this movement, and can be seen as a challenge to the growing threat of Twitter and that company’s long-term integration of corporately sponsored Tweets into users’ feeds. It also shows the impact which mobile browsing has had on the company’s business model; Snapchat’s recent introduction of sponsored Snaps suggests that Facebook is not alone in seeing video advertising as a significant aspect of the future of monetised mobile social media.

LiveRail’s reported purchase price of up to £291 million reinforces Facebook’s perceived commitment to targeted advertising as a large part of the company’s revenue stream. Targeted is the key word here; while the traditional models of advertising have prized volume above all else, LiveRail’s expertise in tailoring adverts to specific demographics and even to individual users is another indicator of the paradigm shift which mass engagement with social media has brought about.

Just as Tumblr have been careful not to disrupt or alienate existing users as they introduce advertising to their site by attempting to ensure that people only see ads which are of genuine interest, so too do Facebook hope to create an environment in which suggested content is almost indistinguishable from user-selected content.

Currently Facebook tracks the browsing history of users even outside of Facebook – a person searching for flights to Venice, for example, may then see ads on their Feed for hotels and restaurants in Venice. This extensive data mining, combined with the technology for tailored ads which LiveRail will bring, should attract advertisers who may previously have been concerned that their products were too specific to be worth dropping into the maelstrom of Facebook’s 1.11 billion monthly users.

Source: sify.com

This is not only a move to ensure direct profits. Next week Facebook will release its quarterly earnings, and with their share price still not as robust as some may have hoped by this stage their purchase of LiveRail could be seen as a move to reassure investors that the company is still focused on growing a more diverse array of revenue streams. Alongside their introduction of promoted posts earlier this year and their trialling of a ‘Buy’ button on businesses’ pages from last week, this latest move should suggest to shareholders that the company is at least open to experimenting with methods of monetising which consist of more than simply a string of ads down the right side of the page which are ignored more often than not.

Douglas Clarke-Williams

Douglas is an English Literature graduate who has written about everything from music to food to theatre, now a content creator for Social Media Frontiers. No topic too large or too small. Follow him @DouglasAtSMF.

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