Facebook video ads delayed again, says report
The social network appears to be struggling with making a TV-like ad unit that won't alienate users.
Facebook is pressing the pause button on an initiative to put video advertisements in News Feed as it considers how not to disrupt the user experience, according to Ad Age.
The social network has long been rumored to be shopping around a high-priced ad unit that marketers could use to run 15-second commercial-like advertisements in News Feed. The units, costing anywhere between $1 million and $2.4 million depending on reach, would auto-play without sound when users scroll over them, earlier reports suggested.
The video ads were originally slated for a summer release but were pushed back to an October unveiling. Now, there's no concrete timing around release, according to Ad Age, which reported that some of the potential advertisers were taking a wait-and-see approach out of fear of being caught up in a potential user backlash.
Facebook declined to comment on video advertisements.
"It is important for Facebook to get the design of this product right and the company is clearly struggling with creating a format that will enable it to sell broad demographic reach to advertisers at scale without alienating users," Macquarie Securities analysts said in the firm's Facebook note published Friday morning. "We remain concerned that there could be significant backlash to any auto-play video and we were skeptical that Facebook would go that route, but all checks indicate that this is still the plan."
Still, Macquarie remains optimistic about the social network's prospects in video advertising and thinks the new unit, should it ever appear, could drive up revenue in 2014. Either way, the firm raised its 12-month price target to $49 a share. Facebook is currently trading around $44.