Facebook's (FB) decision to ramp up its video advertising reach and sell ads on behalf of third parties comes just in time for election 2016. Not including local elections, billions are expected to be spent in support of the presidential bids of Donald Trump and Hillary Clinton.
The social media firm said Monday that it is expanding its Facebook Audience Network by adding video ads for brands advertising across third-party websites and apps, including those operated by publishers USA Today Sports Media Group and Daily Mail. The profit-driving announcement will be a boon for advertisers, including those with political messages to get across.
"This is definitely something that candidates are going to take advantage of," said Ken Dawson, president of Eleventy Marketing Group who ran digital media marketing and strategy for Ben Carson's presidential campaign.
When it comes to digital video display, Facebook has become an increasingly pertinent avenue for politicians to reach constituents via in-stream advertising (ads displayed before, during or after a video), as has, to a lesser degree, Twitter (TWTR) . Facebook's Audience Network expansion provides campaigns, candidates and other entities with an even better opportunity to reach potential voters.
"If this opens up a whole new way for us to buy more inventory in a cost-effective way, there's no better channel as far as making sure you're getting the most bang for the buck for a candidate," Dawson said.
Where Facebook's advertising services stand out from the crowd is in analytics and targeting.
The other options marketers have for video advertising are television or, on the digital side, going directly to ad networks or to Alphabet's (GOOGL) Google and YouTube. None rival Facebook's video prowess in terms of "true attribution" (identifying user actions that contribute to the desired outcome) and the ability to measure how users are watching and engaging.
Facebook, Twitter and Alphabet are holdings in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells FB, TWTR or GOOGL? Learn more now.
"Some of the reach that you get from a Google or a YouTube is great, but you don't get the ability to do the same deep analytics, you don't get a chance to get the interactions that you can with the Facebook platform," said Dawson.
Facebook's platform allows marketers, including those backing political candidates and causes, to get a deeper understanding of their audiences. They can learn valuable information about their bases and constituents and break down this information by segment and demographics in order to change and hone messaging to deliver the right ads.
"Facebook has done a tremendous job of creating a toolset that is very easy to control where your inventory plays, the cost you're willing to pay, who sees it, how long they see it, and the further that they're able to provide those services into more networks, it's going to be all the more powerful for them," Dawson said.
This election season is widely expected to give Facebook revenues a boost.
A recent Recode report citing Nomura analyst Anthony DiClemente estimates that Facebook should get around $350 million in political ads this cycle. Presumptive GOP nominee Donald Trump and the debate surrounding him has likely also driven up engagement numbers on the platform as well and will continue to do so through November. Political advertising on digital platforms is expected to eclipse $1 billion this election cycle -- a first.
The Facebook Audience Network has already proven a powerful tool for advertisers, political and otherwise, since its launch two years ago. In the fourth quarter of 2015, it reached an annual run rate of $1 billion.
COO Sheryl Sandberg mentioned the network's prowess while discussing Facebook's first-quarter earnings results in April.
"Audience Network is important to us because we're making a strategic investment in ad tech, helping advertisers and publishers grow, so it's on and off Facebook," she said. "We think we're uniquely placed to bring people-based marketing to scale and solve the measurement problem, and the Audience Network is a place we're really focused because we feel like we're delivering value for advertisers and publishers, so we're investing behind the growth we've seen."