2013 5 8 mindshare digital pov facebook's new video ads

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  • 1. Facebook’s NewVideo AdsMarta Mattioli,Ruth Corrigan,Eridani Baker8thMay, 2013BackgroundAs online video advertising grows ona global scale, many platforms arelooking to capitalize on thisopportunity and to capture someshare of TV advertising revenue.Among these platforms, Facebook islooking to launch a new video adformat later on this summer.DetailsThere has been no officialannouncement as yet, but it isrumored that the video ads willappear in the newsfeed and auto-play without sound. It will then be possible to activate the audioand the video will restart from the beginning. Each video will last a maximum of 15 seconds,suggesting Facebook has taken note of Vine’s offering – which is limited to a 6 second videoformat.A small number of big brands will be part of the initial trials, including Unilever, Nestlé, Ford,Diageo, American Express and Coca Cola. To create more impact (at least at the beginning) userswill only see video content from one of these advertiser’s in any one day. The ads will be bought ona cost per thousand basis with rates predicted to be in the low $20s, a cost per engagement modelis not currently being considered.ImplicationsFacebook has up to 70 different ad types already, so what will make this new format stand out fromthe rest? It allows Facebook to tap into the rapidly expanding online video advertising market - 41%growth Y.O.Y, US 2012. The new ads are expected to generate up to US $1.5m new daily revenueand up to $4m per day by the end of the year.Some brands, such as Unilever and Volvo have already conducted research into how TV and socialvideo can link together to drive lifts in brand awareness and ad recall. Facebook’s new video formatwill offer a new source of consumer data for advertisers that can feed into such research.The customary consumer uproar that accompanies the launch of ad products on social platformswill undoubtedly ensue; the auto-play feature is likely to be the most talked-about change. There isalso the possibility that users could learn to ignore the ads as they will be easily identifiable as ads.This problem could be avoided if Facebook make the ads work in the same way as sponsoredstories, as users are more likely to watch a video which has been validated by their friends first.SummaryConsumers naturally share video on Facebook, so the introduction of video ads in the newsfeedseems to be a natural addition to the social giant’s large bank of ad formats. There is no mentionof whether this video format will extend beyond desktop, but with large volumes of people nowwatching video on their mobile and Facebook beginning to prove its revenue potential through thechannel (30% of its revenue in Q1 this year was on mobile), it is likely to be in the plan.