Commercials on Facebook?

It was bound to happen eventually. This week Facebook announced that it would soon start allowing marketers to advertise with videos, which would appear in News Feeds.

Right now the videos are in testing phase, according to an AP report on NPR. The story quotes several Facebook users in their 20s who would move away from the social network when they see videos in their News Feeds.

Video advertising is a way for Facebook to go up against YouTube, many are saying. “[It] squares off against Google’s increased efforts to attract billions of dollars to its massive video-sharing audience at YouTube” states this report on USA Today.

Photo and video posts on Facebook get the highest engagement, so it makes sense to make video advertising available to brands. And video ads are sure to become a cash cow for Facebook, which has been limiting more and more the views brand pages receive without paying.

We predict that the video ads will increase yet again user migration away from Facebook. But that they will also increase revenue.