Facebook (FB) & Twitter (TWTR) See Value In Video

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Facebook FB Twitter TWTR Stock NewsFacebook Inc (NASDAQ: FB) | Twitter (NYSE: TWTR)

When you think of the two largest social networks in the world, what are the names that come to mind? For most people, the answer is going to be Facebook and Twitter. While both of these companies have completely different plans, they do seem to have one thing in common. Both of them are moving to create stellar video advertising platforms. Today, we’ll discuss the data revolving around videos in social media, the cost of video advertising, and the moves that Facebook and Twitter are making to take their piece of the video advertising pie. So, let’s get right to it…

There Is An Overwhelming Demand For Social Video Advertising

The first thing I think we should touch on here is why the two largest social networks online today are looking into video advertising. In researching the topic, I came across a staggering statistic. From what I’ve been able to dig up, almost 4 billion videos are watched through a social media platform each and every day. To put that number into perspective, if you added the entire populations of the United States, Europe, UK, China, Japan, and Russia, the total would come to only 2.7533 billion people. So, in the world of social media, more videos are watched than the total combined population of these countries every single day!

The Cost Of Video Advertising And Why FB & TWTR Have Tons To Gain

In the past, the best form of advertising for social media networks to offer has been cost per click or cost per mil advertising. Essentially, advertisers would pay Facebook and Twitter a set cost for each ad click or a set cost for every thousand ad views; generally being banner ads. However, advertisers are willing to pay far more for video advertising. As a matter of fact, video ads generally cost 10 times more than the average banner ad. So for Facebook and Twitter, this could prove to be an incredibly lucrative move.

Facebook & Twitter Are Openly Experimenting With Video Ads

Finally, it’s no secret that Facebook and Twitter are both experimenting with video ads. While Twitter has been relatively quiet about their experiments; that’s not necessarily the case for Facebook. As a matter of fact, in the beginning of the year, Facebook made an announcement that the company would be focusing heavily on generating revenue from video advertising. Truth be told, the company has been testing the video ads feature for a few years at this point. They’ve also held meetings with some of their top advertisers to get a feel for the demand for video ads and what would be expected. Some of these advertisers including McDonald’s, Ford, Lionsgate, and Nestle are already displaying video ads in Facebook.

What This Means For FB & TWTR Moving Forward

In my view, the answer is different depending on which social network you look at…

  • Facebook – Facebook is a leader in social media innovation. They own the world’s largest social network and have expanded it to become far more than a social experience. The video ads to me are simply icing on the cake that proves that this network is going to continue to thrive.
  • Twitter – Twitter on the other hand is having a bit of a hard time. Their membership has seemingly hit a plateau and they are doing everything they can to change that. Video ads will definitely bring in more dollars; but more video in TWTR may help to solve the new users issue moving forward.

All in all, I think that the introduction to video ads in both of these networks is a great thing that will likely have a positive impact on their stock prices moving forward.

What Do You Think?

What are you expecting to see from TWTR and FB moving forward and why? Let us know your opinion in the comments below!

1 COMMENT

  1. Video advertising has become more and more popular over the years but it is still late compared to other forms of advertising. I’m sure Facebook & Twitter have studied the benefits of video advertising and this is definitely a key asset as videos tend to be catchier and they usually get more results, financially speaking.

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