By some estimates, Google and Facebook are capturing upwards of 80% of every new dollar spent on digital advertising.
But with the pool of dollars spent on television ads still being slightly greater than the pool of dollars spent on digital ads, it’s no surprise that both companies are trying to find ways to tap into television ad budgets.
This week, Facebook’s efforts in this area will enter a new frontier, as the world’s largest social network will begin delivering video ads to consumers using over-the-top TV devices like Apple TV and Roku.
As Recode, which broke the news of Facebook’s initiative, observed, the company’s effort could bring a new level of targeting to ads in this space.
“That’s because Facebook can use the same targeting data that powers the rest of its advertising network to the set-top boxes, even though those apps aren’t directly connected to Facebook.”
Facebook’s connected TV ads will be delivered through the company’s Audience Network, which was launched in 2014 as “a new way for advertisers to extend their campaigns beyond Facebook and into other mobile apps.”
In effect, Audience Network is Facebook’s version of Google AdSense, and it’s an increasingly important asset for Facebook as it addresses ad load challenges that could become a real problem in 2017.
Facebook has partnered with A+E and Tubi TV to deliver ads in their apps. Initially, it won’t sell inventory to marketers. Instead, it will serve up house ads for Facebook services or nonprofits it works with.
To target ads, Facebook will use the IP addresses of connected TV devices to identify the Facebook accounts that are likely associated with those devices.
Success is not guaranteed
While Facebook’s targeting capabilities will obviously be attractive to marketers and content owners alike, it remains to be seen whether the company’s efforts to stake out a position in the market for over-the-top TV devices will be successful.
As AdAge points out, Facebook shuttered LiveRail, the video ad exchange it purchased for half a billion dollars two years ago. And Facebook will almost certainly find itself competing with the makers of the over-the-top TV devices themselves, such as Apple.
So while Facebook’s Audience Network seems like it has the makings of a contender in the space, the battle over television ad budgets will be hard fought.