Facebook has acquired LiveRail – a tech start-up that helps companies place more relevant ads in the videos that appear on their websites and apps.
LiveRail also provides 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) to buy the firm.
Online video advertising is forecast to grow robustly in the coming years.
“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.”
According to LiveRail, it delivers more than seven billion video ads per month.
The online and mobile ad sector has been growing rapidly in recent years.
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.
