Facebook Acquires LiveRail

Facebook has bought LiveRail, a tech start-up company, designed to helps companies place more relevant ads in videos that appear on their websites and mobile apps.

According to a study published in April, more than £1bn was spent on mobile ads in the UK alone in 2013, a rise of 93 per cent on the previous year.

Some other estimates suggest that online video advertising revenues are likely to hit $6bn in the US this year.

Online video advertising is forecast to grow robustly in the coming years and according to LiveRail, the online and mobile ad sector has been growing rapidly in recent years, claiming to deliver more than seven billion video ads per month.

LiveRail has been created to provide a real-time bidding platform for marketers looking to place ads on online videos.

The firms did not reveal the financial terms, but some reports indicate that Facebook paid between $400m and $500m (£233m and £291m) for the purchase of the firm.

 “More relevant ads will be more interesting and engaging to people watching online video, and more effective for marketers too,” Brian Boland, vice president of ads product marketing and atlas at Facebook, said in a blog post.

“Publishers will benefit as well, because more relevant ads will help them make the most out of every opportunity they have to show an ad.”

As a result, a growing number of firms – especially social networking platforms such as Facebook and Twitter – have been looking at ways to attract more advertisers and tap into the sector’s growth.

Earlier this year, Facebook said it would start serving ads to third-party mobile apps via a new advertising network.

Last year, Twitter acquired MoPub, a mobile advertising exchange that acts as a mediation service, allowing marketers to manage the placement of ads across several networks, including Facebook.

Analysts said that given their large user base, social networks were likely to get a big share of this growing market.

“It is no longer about saying, ‘My ad was seen by so many people,’” said Sanjana Chappalli, Asia-Pac head of LEWIS Pulse, a firm specializing in digital marketing.

“But it is now about knowing who those people are and how they have responded to the information fed to them.

“And on that front, social networks enjoy a tremendous advantage over everyone else.” she added.

Meanwhile, Google’s AdMob and Apple’s iAds platforms and several other smaller firms are also competing to provide the adverts shown on mobile phones and tablets.

Millennial Media, Flurry and Nexage are among the firms promoting their own versions of “programmatic buying”, a way for firms to target their ads at a specific type of consumer via a chosen type of app at an appropriate time and geographic location.