Networking phenomenon Facebook has purchased advertising company LiveRail, a firm that places relevant advertising material into videos that appear on apps and websites.
The financial agreements were not disclosed by news suppliers, which estimate that the social platform paid somewhere between $400m and $500m (£233m and £291m) for the enterprise.
The deal may be seen as key planning and a way in which the social network can build upon the revenue it currently makes through ads, as video advertising is a prosperous sector that is forecast to show rapid growth in the near future. This would fit perfectly with the company’s plans for mobile advertising, another arena that finds itself in a period of strong growth.
Studies have suggested that the UK spent over £1bn on mobile advertising last year, displaying a significant 93% rise from previous years. Such research is attracting the attention of a number of companies, especially those in the social sphere like Facebook.
Analytics firm comScore said that, in May this year, LiveRail served video advertisements to more than 37% of people in the United States.
In a blog post released by Facebook, Vice-President of Ads Product Marketing and Atlas Brian Boland has said:
“More relevant ads will be more interesting and engaging to people watching online video, and more effective for marketers too.”
LiveRail, founded in 2007, is believed to deliver a total of more than seven billion video ads a month and, for the time being, will remain to function as an independent company. However, Boland hopes that the firms will eventually combine forces to enhance video advertising.