The social network has agreed to purchase video ad-tech start-up LiveRail, a move indicating the company is expanding its ad business outside its own properties. Will Facebook now be able to rival Google in terms of video advertising?
With its most recent purchase, Facebook is delving deeper into video advertising. The platform has acquired advertising-technology start-up LiveRail in order to serve better and more relevant video ads, a move that may allow it to rival Google's premium programmatic video marketplace.
LiveRail, founded in 2007, is a video supply-side platform that helps publishers find relevant ads, and connects marketers with websites and apps that have video ad inventory. The company has automatically matched video ads with videos shown on a number of websites, including Major League Baseball, ABC Family, and A&E Networks.
As real-time bidding represents a very important part of LiveRail's business, the acquisition will allow Facebook to connect with publishers in a programmatic fashion.
"Facebook is buying a lot of things in this deal: They are buying a significant number of talent, they are buying significant relationships with publishers, and they are buying significant relationships with brands who are transacting their products programmatically," says Mark Yackanich, chief executive (CEO) of Genesis Media, an online video technology company.
In theory, he says, LiveRail can help Facebook create a premium video universe that is similar to Google's premium programmatic video marketplace.
Essentially, "this deal is all about data," Yackanich says, explaining that the acquisition will also allow LiveRail to extract information from Facebook data and syndicate that information into its marketplace via various tools. This way, Facebook and LiveRail can help publishers monetize their properties more efficiently.
Byron Ellis, chief technology officer (CTO) of ad-tech company Spongecell, agrees that Facebook data plays a pivotal role in the deal.
"Facebook's acquisition of LiveRail is really the beginning of a battle for advertising dollars, between Facebook's behavioral data and Google's search data," he says. "And the acquisition gives Facebook ammunition to take on Google's DoubleClick for Advertisers (DFA) on the video front."
It's not clear yet if the social media giant will really be able to compete with Google in the video space in the future, but it's obvious that video is becoming more and more important to Facebook's overall advertising strategy.
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Yuyu Chen is a junior reporter at ClickZ. Her work has appeared in Local East Village, New York Daily News and Brooklyn Chamber of Commerce website. Yuyu received her M.A. in Business and Economic Reporting from New York University in May, 2013.
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