On Monday, the company said that it is making another strike at competitors such as Alphabet's Google in its advertising hosting efforts. In the process, Facebook will deliver surefire gains to investors.
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The company said that it will help marketers sell and place digital video ads on third-party websites and applications. Marketers will be able to use Facebook's ad brokerage platform, Audience Network, which already sells and places ads across thousands of websites.
Video is the next hot thing in Internet marketing, and digital video ad spending will grow by about 28.5% this year, to $9.84 billion, according to a study by research firm eMarketer.
Audience Network is already proving to be a successful venture for Facebook. The network includes popular websites such as the Daily Mail and Mashable, and the number of publishers, or apps and sites that belong to the network, has grown by about 620% in the past year.
In the fourth quarter, Audience Network had an annual run rate of about $1 billion.
But overall, Facebook has turned into an ad juggernaut, with revenue in the sector of more than $17 billion. This is clearly part of the Facebook story that makes it such a great opportunity for investors.
Facebook will allow marketers to target their video ads across the sites offered by Audience Network using the company's powerful user targeting tools. Advertisers will be charged only if at least 10 seconds of a video is viewed.
Ads will be up to 30 seconds long and will appear before, during or after video content streamed on Audience Network publishers' sites.
Marketers will also have the option of purchasing in-article video ads, which will be formatted within articles on websites. These videos will play automatically when scrolled past and last as long as 20 seconds.
Facebook will take a cut of the revenue generated from these ads. Although the company hasn't specified the requested percentage, Facebook takes about 30% from Audience Network ads now.
And Facebook already has its first customer for its expanded video ad empire: restaurant chain Jack in the Box.
Facebook is becoming much more than just a social-media website. The company has made no secret that it plans to dominate the Internet.
Other social-media sites, such as Twitter just can't compete with Facebook's innovative leaps.
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On Friday, analysts at MKM Partners raised their price target on Facebook to up to $150 a share from $135, which would represent a gain of 27%.
"The stock is pricing in many years of growth, but the trajectory the business is expanding has never been seen at this scale," MKM Partners analyst Rob Sanderson wrote.
Facebook stock is down just a little bit Tuesday, trading at about $118 a share. Each share price dip presents an excellent opportunity to purchase the stock.
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