Facebook’s purchase of video supply-side platform (SSP) LiveRail for $500 million underpins its deeper foray into video advertising and positions the social network as a major force in premium publisher monetization.
While some experts argue the purchase is a direct response to Google’s recent launch of its programmatic video marketplace Google Partner Select, the sum of Facebook’s recent moves – including expanding its targeting mechanisms via the Facebook Audience Network (FAN) – indicates a greater strategy.
“Very quietly, Facebook has developed all these hooks into all these publishers, whether it was through Facebook comments or Facebook Connect, [but they haven’t really] marketed it as being this massive publisher network,” said Brian Shin, founder and CEO of online video company Visible Measures.
“LiveRail, as well as [Facebook-owned ad server] Atlas, really plugged a hole where Facebook was being embedded inside Web pages, primarily, and not so much mobile apps and things like that," he added, " LiveRail and Atlas combined… [will create improvements] to ad flow.”
Facebook’s technologies, in aggregate, give it access to what sources describe as one of the most robust video ad-serving technologies on the market as well as the ability to extend brand spend beyond Facebook’s walled garden. Facebook can accomplish this via premium publisher networks in the LiveRail marketplace. Adding Facebook audience data could also make these video buys much richer and more targeted.
"LiveRail is Facebook's supply side platform for ads off of Facebook -- Twitter has MoPub and now Facebook has LiveRail," as Jason Stein, founder and president of social media agency Laundry Service described it. "If you're placing a video ad on Facebook, you can simply extend this through FAN… whereas with a Facebook photo or link post, you'd need a different creative asset."
Facebook could feasibly say, “How can we extend the demo out onto other publishers where Facebook targeting or viewability restrictions might not work for a particular advertiser?” said Jamie Elden, CRO and head of entertainment at LIN Digital. LiveRail’s marketplace “gives them the footprint into not being able to say no to an ad buyer. It’s saying, ‘Now we can give you everything.’”
Adam Harris, VP of product strategy for Collective Media, agreed.
“They’ve been trying for a really long time to get a wider, diverse position in the advertising ecosystem and it’s part of why they bought Atlas and [why] David Jakubowski is [now] over at Facebook,” he said. “This acquisition allows them to leverage video inside their own ecosystem and then potentially offers the ability to carry Facebook data into other spaces.”
Another side benefit of the LiveRail buy is rooted in Facebook’s relationship with Nielsen. Online publishers seek to diversify video content and pre-roll inventory through additional layers of innovation, said Shin.
“Facebook is really the underlying audience measurement underneath Nielsen’s Online Campaign Ratings (OCR),” Shin added. “Facebook does not necessarily pound their chest about this because their strategy around advertising is essentially only charge when a campaign lines up with Nielsen OCR.”
Facebook, Google and AOL are in an arms race to attract budget that falls away from broadcast, and each is doing this through heavy investments in video. These investments manifest in the form of advanced targeting and viewability products – Google, for instance introduced its guaranteed reserve product Google Preferred.
Although Facebook has served as the basis for anonymous online demographic data for Nielsen’s panel, Google has also joined the party. It hooked its demand-side platform DoubleClick Bid Manager to the Facebook Exchange (FBX) last fall and recently revealed support for Nielsen OCR metrics on Google Preferred YouTube ad campaigns and the beginnings of OCR integration to DoubleClick.