- Facebook is testing ads in short Watch videos after limiting ads to videos that run three minutes or longer.
- It’s also giving publishers the option to remove jarring mid-roll ads from videos.
- The changes show how Facebook is still figuring out advertising for Watch.
- Facebook also outlined how it will make money from creators’ subscriptions starting in January.
- Click here for more BI Prime stories.
Facebook is tweaking its video strategy with Watch, its 2-year-old hub for long-form video. It’s testing ads in shorter video clips and giving creators tools to control which ads appear in their videos.
Until now, Facebook has only permitted ads in video that last at least three minutes, but it’s now testing ads in clips that last one to three minutes.
“Our primary focus remains very heavily on longer-form content, but we wanted to support monetization that drives loyalty and intent,” Kate Orseth, Facebook’s director of media monetization product marketing, said at a recent media event in New York to brief reporters on the changes. “We do see that in some cases, shorter content can drive that behavior, and we know that’s an area where we would like to be able to support our partners.”
Read more: These are the 21 powerful executives to know behind Facebook’s $55 billion ads business
There are three ad formats in Watch videos: Pre-roll, mid-roll and image ads that place a display-like ad below videos. The test is limited to the image ad format. As Facebook has increased the number of ads in Watch, some publishers have complained that mid-roll ads can turn off users, and the social network is also rolling out a feature that lets creators cut out those mid-roll ads.
Facebook has dialed up ads in Watch
Orseth said that creators in 40 countries and 17 languages are running ads in videos since Facebook flipped the switch on Watch globally last year. She also said that the number of Pages running ad breaks has tripled over the past year, but wouldn’t say how many publishers in total are running ad breaks.
A variety of publishers from BuzzFeed to companies like Made in America that represent creators use ad breaks to make money from their content.
Facebook has been pitching advertisers on preferential access to top content on Watch from its originals program and publishers including BuzzFeed and Group Nine Media’s The Dodo. These Showcase ads are priced similarly to upfront deals from TV networks, YouTube’s top-tier Google Preferred program and streaming services like Hulu.
Noah Mallin, head of U.S. experience and content at the agency Wavemaker, said the expansion of ads to shorter clips shows Facebook is getting users to visit the Watch tab, where users expect to see more ads than they do in the news feed.
“For Facebook, they’re navigating the question of whether they want to seriously fund premium content, and if so, is there a premium for ad dollars that goes along with that,” Mallin said. “I don’t know if they feel like they’ve got the answer to that question yet, but these are the ways that they get there.”
Read more: Facebook is making its biggest bet to date to take on YouTube for video dollars. Ad agencies aren’t convinced.
Watch also will be competing with a growing number of ad-supported streaming services like Jeffrey Katzenberg’s forthcoming Quibi service and WarnerMedia’s upcoming streaming service, said Alan Wolk, cofounder and lead analyst for TVREV. “There’s going to be so much of that to watch; why would someone want to watch something on Facebook on their phones?” he said.
Facebook plans to take a cut of creators’ subscription revenue — but not from news publishers
Facebook is also changing the terms of its subscriptions product for creators.
Over the past year, Facebook has tested a subscriptions product that allows creators like LadBaby to offer extra content to fans like Facebook Groups and exclusive content. Until now, Facebook let creators keep all the revenue from subscriptions. But starting January 1, it will keep 30% of the revenue on desktop, leaving creators with 70%. On mobile, where Apple and Google collect 30% as part of their standard tax rates for apps, Facebook will not take an additional cut of revenue.
In 2021, Apple and Google’s take will drop to 15%, and Facebook will split the 30% mobile revenue with Apple and Google.
“We’ve seen a variety of types of creators use this successfully after testing it over the past year,” Orseth said. “It offers creators creators a predictable revenue stream that they can plan against and works well for niche creators or perhaps those with edgier content.”
The new terms do not apply to Facebook’s subscription product for news publishers that lets publishers earn revenue from paywalled content. A spokeswoman said Facebook does not plan to touch that revenue source.
Join the conversation about this story »
NOW WATCH: The world’s tallest mountains like Mount Everest and K2 have a ‘death zone’ — here’s a first-hand account of what it’s like