Facebook announced on Wednesday that it is set to acquire video ad tech start-up LiveRail. LiveRail offers a supply side platform that allows publishers to connect with marketers for targeted ad placement. Brian Boland, Vice President of Ads Product Marketing and Atlas, Facebook, confirmed the news via a blog post. Terms of the deal were not disclosed though a media reports suggest that the price is in the range of $400 to $500 million.
“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. More relevant ads will be more interesting and engaging to people watching online video, and more effective for marketers too. 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 wrote.
LiveRail was founded in 2007 and offers a comprehensive platform for online video publishers. It also helps marketers by providing them with access to premium video inventory and the information that they need in order to decide where to show their ads. It’s clientele includes companies like Major League Baseball (MLB.com), ABC Family, A&E Networks, Gannett, and Dailymotion.
“When you talk about sales conversions, user profiles become important and this is what Facebook provides—it is a highly targeted medium; more targeted than even Google. Right now Facebook seems to be concentrating on educative videos but at some point they would like to link videos to the demand side,” opines Preetham Venkky, Business Head (Asia), KRDS.
Facebook has been positioning itself as an advertiser-friendly platform in recent times. Last year, Facebook debuted auto-playing video ads. The social networking giant has also launched its own ad exchange. With Facebook eyeing a larger piece of the programmatic and video ad pie, the acquisition of LiveRail fits perfectly in the company’s larger game plan.
In fact, Facebook has been a little slow when it comes to leveraging video content, a medium which is expected to be the largest form of content online in coming years. To get an idea, consider the eMarketer report from last month, which states that digital video ad spending will increase by 41.9 per cent this year, reaching $5.96 billion, while TV advertising in the US will grow 3.3 per cent to hit $68.54 billion.
Piyush Chapperwal, National Sales Head (Online), Vdopia also feels that the acquisition of LiveRail is a perfect fit for Facebook. “The trends these days are towards programmatic and videos. Through the LiveRail acquisition, they have gotten both on a platform, which is already established,” he said.
The LiveRail acquisition along with recent development at the company, like the launch of the Facebook ad exchange as well as a mobile ad exchange and targeted ads for users, show that Facebook is ready to go beyond its own walls and exert a much larger influence on digital advertising. With its targeting capabilities proven without doubt and a large trove of content already available, the acquisition of an established programmatic trading platform could be the last piece of the jigsaw for Facebook.
A hint of things to come might be seen in Boland’s statement when he talks about being “excited about the future for video publishers and marketers” and making “video advertising much better for everyone”.