Analyst: Facebook Video Ads Could Add $800 Million In Revenue In 3 Years
Divergent / Summit Entertainment
A scene from Divergent, the new movie that's being advertised in Facebook video ads today.
The pair estimate that Facebook's total revenue will rise to as much as $10.2 billion in 2014. Here is their breakdown:
There has been talk that video ads could command $3M+ daily and we estimate video ads could represent as much as 5% to 10% of Facebook's advertising dollars in 2014, depending on how aggressively Facebook rolls them out. Ultimately, video ads will help Facebook more directly go after the $200B+ worldwide TV advertising market. We note that in the U.S. alone roughly 90M to 100M people are using Facebook during prime-time TV hours.
...Ultimately, including video ads, we see advertising revenue potential of $800M+ worldwide over the next three years.
Facebook began a test of autoplay video ads in its News Feed today, with inaugural client Summit Entertainment and its movie Divergent. Here's the trailer for the movie:
Disclosure: The author owns Facebook stock.
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