According to a recent report in Recode, Facebook has decided to take a page out of YouTube’s book by beginning to test mid-roll ads on its videos. This decision comes after complaints that Facebook’s current video ad model, which does not allow ads to run before videos, has significantly limited the returns that video publishers have seen on their content.
While YouTube does run ads before videos that can be skipped 5 seconds in, Facebook is testing ads that can be inserted 20 seconds into videos that are at least 90 seconds long. Facebook has already rolled out a similar system for live video, testing a feature where publishers of live video content can insert short sponsored videos into live streams, similar to a commercial break on television.
Moneymaker
This move not only marks a shift in Facebook’s advertising strategy, but it also indicates how Facebook plans to monetize its video platform. Facebook has been paying media companies and celebrities to produce live video for its platform, but any advertising revenue generated by the new ad scheme will be kept by the social media network. Any revenue generated by the new mid-roll ad format, however, is to be shared between the video publishers and Facebook; the former will receive 55% of the revenue and the latter the rest.
By increasing the revenue potential for video ads, Facebook is counting on video producers to flock to the new ad system. But by only allowing ads after 20 seconds, and putting in a length requirement for videos to qualify for the new ad format, Facebook is also putting pressure on video publishers to produce quality, engaging content that is longer than what many might be used to.
Fewer clicks, more engagement?
This also puts pressure on those publishers whose focus is not necessarily on making money from videos, which raises questions about how changes to Facebook’s video platform might change the way companies use it. Either companies will begin to produce content with the intent of generating ad revenue from it, or they could continue to use video in the same way, with the same varying degrees of effectiveness.
As Joe Hyland, the CMO of ON24, put it: “By only allowing ads 20 seconds into a video, Facebook is… sending a clear message to publishers — create engaging content, or else your ads won’t be seen.” Hyland also said that he thought it was “a shrewd move by Facebook to ensure only the most engaging content makes its way on the platform.”
It remains to be seen how effective Facebook’s mid-roll test will be. It’s possible that the increased costs associated with producing longer, more engaging content will prevent many brands from using the new ads effectively. On the other hand, those who do invest may find that the response they get more than justifies the expense. Right now, the ball is in the publishers’ court.