MashBlur

Facebook confirmed Tuesday that it is testing video ads this week that automatically start playing in the News Feed on desktop and mobile. The move is among the most significant of the company's many, many efforts to introduce new revenue-generating products following its IPO last year. Some analysts predict that video ads could be a billion-dollar market opportunity for Facebook, but it comes with the risk of potentially alienating users.

For nearly a year, there have been rumors that Facebook was close to introducing video ads, but the timeline was continually pushed back. Sources familiar with the rollout told Mashable that Facebook showed some advertisers the video ads over the summer, but delayed the launch to continue tinkering with the details. Mark Zuckerberg, Facebook's CEO and cofounder, was said to be personally involved in making the video ads more palatable to users.

"We've all seen over the years how users can respond to changes on Facebook," said Andrew Lipsman, VP of industry analysis at comScore, alluding to the blowback from previous attempts to introduce new ads and features. "[These video ads] are clearly intended to respect the user experience."

While the ads will autoplay in the feed — the dreaded A-word — there won't be any sound unless users click or tap the video on their device. To put it another way, the video ads may make the News Feed a little busier, but they won't make it noisier. If that sounds like a minor difference, consider how disruptive autoplaying content with sound was on the original MySpace.

By muting videos, Facebook may significantly reduce the number of users who will experience an ad on the page, but those who do click to listen to the ad will be more valuable to brands because they've opted in to the experience. The question is whether and how much users will choose to click.

On other platforms like YouTube, Hulu and various news publications, users view video ads in order to consume the video content that comes after. As of right now, Facebook — which is not primarily a video platform — would be asking users to watch the ad simply to watch the ad. That might work well for entertaining ads like movie trailers, which is how Facebook is testing the video ad feature this week, but as Lipsman points out, "how well will that extend to other categories where it's more general consumer brands?"

"The onus is on creative shops to make the most of this opportunity," said Colin Sutton, director of social for Omnicom's OMD, a media agency with members on the Facebook Client Council, which Facebook set up to engage with advertisers. "We are as an agency really, really bullish on this product... What we've seen from testing and what the Client Council has been testing is that response rates are through the roof."

The number of video ads online more than doubled between October 2012 and October of this year, according to comScore and data provided by eMarketer suggests that engagement is significantly higher for in-stream video ads than other formats. In its blog post Tuesday, Facebook revealed that it has been experimenting with ways to make videos more engaging since September and has seen engagement increase by more than 10%.

"The average click-through rates on video ads are between 0.8% and 2%. We would expect higher click-through rates on Facebook ads," said Aaron Goldman, head of global marketing at Kenshoo, which is part of Facebook's Strategic Preferred Marketing Developer program. "Anytime Facebook introduces a new ad unit, we see high engagement in the beginning and that's more because it's new and jumps off the page." That is particularly true for video ads, which will literally jump off the page by virtue of being a moving image on a page filled with static content.

Beyond that, Goldman and others we spoke with expect Facebook to boost engagement by letting marketers target video ads at particular users based on age and gender, among other factors.

"This is a clear shot across the bow that Facebook can start to replace ad dollars on television," Sutton says, "and potentially do a lot more work for the money.