Facebook offers in-stream-only video ad buys as it looks to rival YouTube, TV

A week after Facebook revealed its upcoming video service, Watch, to compete against Google’s YouTube, as well as streaming and traditional TV networks, the company is ready to make a run at its rivals’ advertising businesses.

Facebook has started selling video ads that will only appear in videos that people watch on its social network or across its ad network of third-party sites and apps, the company announced on Thursday. In other words, video-hungry advertisers can finally buy video ads from Facebook that will only run in the same context as the ads they buy from YouTube, Hulu and TV networks — in-stream video ads that people will be more likely to watch, and watch with the sound on.

Previously, video ad buys on Facebook meant ads could appear as pre-roll or mid-roll ads within video content and as standalone sponsored posts in the news feed. Conceivably, the combined in-feed and in-stream placements meant a higher potential reach for the advertiser, but it also meant a higher potential for wasted impressions because the ad had to appeal to two potentially different audiences in two different contexts. An ad had to capture the fickle attention of people skimming through their news feeds, and it had to capitalize on the captive attention of people waiting for the video they were watching to resume. Further complicating matters, the news feed viewer would be less likely to watch the ad with the sound on than the person already watching a video.

This dilemma hasn’t been significant since Facebook only rolled out ad breaks earlier this year, so the in-stream placements have been considered supplementary inventory by ad buyers. But with the roll-out of Facebook’s Watch tab and its original shows, advertisers are likely to become more interested in buying its in-stream ads and more cognizant of the difference in context and audience.

“In news feed we continue to have feed-style ads where the video ads run between stories. And increasingly we’re offering advertisers in-stream ads … to reach people when they’re leaning back and watching video and that’s a natural ad experience in that environment. So with this announcement we’re excited to offer both of these things to advertisers who are running campaigns with us,” said Facebook product marketing manager Kate Orseth.

In-stream buyers will be able to choose to have their ads appear as mid-roll ads within live and on-demand videos on Facebook or as pre-roll or mid-roll ads within videos across Facebook’s Audience Network ad network.

Less than a third of Facebook’s video ads are watched for at least two seconds with at least half of the ad in view, according to Digiday. That’s likely because a majority of those ads appeared as standalone sponsored posts within people’s news feeds. But Facebook’s video ads seem to fare much better when they appear within a video someone has chosen to watch. According to Facebook, more than 70 percent of its in-stream video ads that are 15 seconds or shorter are watched to completion. Facebook declined to comment on completion rates is for its in-feed video ads.

While Orseth maintained that it’s still important for in-stream video ads to capture people’s attention quickly, owing to the five- to 15-second time limits, “you do have a little bit more time to deliver, say, a more complex message in a stream-like environment,” she said.

If advertisers find Facebook’s in-stream video ads to be more valuable than its in-feed video ads, then they’ll likely be willing to pay more per ad. That would help Facebook increase its revenue-sharing pitch to the media companies and independent video creators that it’s trying to woo to its new Watch tab. That would increase the amount of in-stream inventory Facebook could sell, and help erase any revenue growth concerns by reducing its ad-load limitations.

But there’s no guarantee that Facebook’s in-stream-only video ad placement option will win over all advertisers. As Facebook starts slotting ads within more publishers’ and creators’ videos coinciding with its Watch tab’s roll-out, the company will have to be careful to avoid the brand safety problems that plagued YouTube’s ad business earlier this year when brands’ ads were found to be attached to controversial video, and some big brands pulled back budgets from Google’s video service.

Facebook has started to head off any issues. For starters, advertisers can exclude their ads from running against videos in certain content categories like “dating,” “debatable social issues,” “gambling,” “mature” and “tragedy and conflict.” They can also block individual publishers, though there’s a limit to how many publishers can be blocked. And by the end of this year, Facebook plans to give advertisers complete lists of the publishers whose videos may carry a brand’s ad before the brand completes an ad buy.

About The Author

Tim Peterson

Tim Peterson, Third Door Media’s Social Media Reporter, has been covering the digital marketing industry since 2011. He has reported for Advertising Age, Adweek and Direct Marketing News. A born-and-raised Angeleno who graduated from New York University, he currently lives in Los Angeles. He has broken stories on Snapchat’s ad plans, Hulu founding CEO Jason Kilar’s attempt to take on YouTube and the assemblage of Amazon’s ad-tech stack; analyzed YouTube’s programming strategy, Facebook’s ad-tech ambitions and ad blocking’s rise; and documented digital video’s biggest annual event VidCon, BuzzFeed’s branded video production process and Snapchat Discover’s ad load six months after launch. He has also developed tools to monitor brands’ early adoption of live-streaming apps, compare Yahoo’s and Google’s search designs and examine the NFL’s YouTube and Facebook video strategies.