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Watching Facebook How Video Ads Will Power the Social Platform’S Growth in 2019

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Watching Facebook How Video Ads Will Power the Social Platform’S Growth in 2019 PointWATCHING of View FACEBOOK — January - How Video 2019 Ads Will Power the Social Platform’s Growth in 2019 Watching Facebook How Video Ads Will Power the Social Platform’s Growth in 2019 In a year full of very public challenges for Facebook, the company is also making crucial decisions that will shape its future revenue growth. Video is the largest potential area of new advertising revenue for Facebook over the next 10 years. Success could come quickly, but the company will need to move aggressively in 2019 to lay the groundwork for a growing share of brand advertising. So far, this decade has seen no more important change every day. In 2018, Google will generate an estimated in the media landscape than the migration of eyeballs $3.3 billion in U.S. ad revenue from the site.3 from linear to digital video. From 2015 to 2019, eMarketer estimates that time spent per day with digital video “Video is a critical part of the future. It’s what our devices will increase by 40%.1 In roughly the same community wants, and as long as we can make period, weekly television consumption has decreased it social, I think it will end up being a large part of by nearly 45% for the 18-24-year-old audience, forcing marketers to reconsider how they raise brand awareness our business as well.” at scale — particularly against the younger half of the Mark Zuckerberg, Facebook CEO demographic spectrum. November 2018 Weekly Live TV Viewing 2014-2018 Weekly Live TV Viewing 2014-2018 These dramatic marketplace shifts haven’t been lost on 27.8 26.7 26.1 24.4 22.5 17.3 Facebook. With more than 1.4 billion daily active users 14.9 13.7 11.4 9.5 globally,4 and with a near-perfect profile of who its users Q2 - 2014 Q2 -2015 Q2 - 2016 Q2 -2017 Q2 -2018 are and what they like, Facebook has a massive Average Viewer 18-24 Years Old opportunity to impact the future of digital video. Nielsen Total Audience Reports, December 2017 While television itself has a substantial digital Facebook has already embraced video in the News distribution play, the biggest beneficiary of this shift, by Feed and Messenger — and video has long been far, is YouTube. Today, YouTube has 1.9 billion 2 logged- massively popular on Facebook-owned Instagram, in monthly users who watch more than 5 billion videos in both Feed and Stories. And in June of 2018, 1 WATCHING FACEBOOK - How Video Ads Will Power the Social Platform’s Growth in 2019 Instagram introduced IGTV,5 a new app for sharing This is a game-changing shift that has already long-form video. But it is the near-term strategy increased the number of Facebook Pages eligible for around Facebook Watch — the company’s largest bet in-stream video ads. A recent Digiday article notes on destination video content — that will determine the that there are more than 38,000 Pages eligible to carry company’s success in capturing migrating TV dollars. an in-stream video ad.8 Although Watch has been slow out of the gate, Facebook has already started major initiatives to In widening the opportunities for in-stream moneti- bolster its long-term potential. zation, Facebook has committed to an entirely new ecosystem built to attract TV advertisers. To succeed, Opening the Floodgates creators, viewers and a new set of buyers will need to The main differentiator between online video be courted. platforms and TV content (linear or premium VOD) is programming. On TV and Netflix, viewers are given a limited set of options, and those options are carefully “Three months since our global launch, there are curated and marketed. already more than 400 million people monthly and 75 million people daily who spend at least On YouTube today, that’s a different story. The result one minute on Watch.” of a completely open platform for consumers is that Fidji Simo, Facebook Head of Video they can find videos about virtually any subject or December 2018 from any genre. From an advertiser’s perspective, there are unlimited options when it comes to content adjacency (for better or worse6). Initially, Facebook launched Watch as a closed beta test for mainstream publishers like CNN, Condé Nast and BuzzFeed. The company curated a small set of programmers that looked more like a cable TV lineup than YouTube content, and enabled in-stream ads. In late August 2018, Facebook departed from the role of curator. The company rolled out in-stream ad mon- etization globally,7 and started allowing anyone with more than 30,000 views (>1 min) and 10,ooo followers to make money with commercials shown as pre- or mid-roll ads. 2 WATCHING FACEBOOK - How Video Ads Will Power the Social Platform’s Growth in 2019 Here are three moves Facebook could make in 2019 to grow the video business: 1. Give Users a Reason to Watch Top 100 Facebook Pages Running Video Ads A peek at the most popular genres on Watch The first and most complicated issue for Facebook to solve is the reconciliation between social media and video as a 0 5 10 15 20 25 Comedy medium. This is a challenge for a company that defines General Interest its success by measuring meaningful social interactions.9 TV, Movies & Shows Inspirational While storytelling is by nature a social art form, How-To Vlog watching stories unfold is not necessarily so. Still, Pets & Animals users want to leverage the richness of their social News & Politics networks to find great content, and that’s one of the Note: Median views in the past 28 days as of Dec. 5, 2018 reasons they look to Facebook. By The New York Times | Source: OpenSlate We anticipate Facebook’s 2019 plans for its video “If Facebook gets this right and can generate product will include better search, better organization scale of inventory and scale of audience, they around Pages, and optimization between the News Feed have the opportunity to combine sight, sound and Watch experiences. Striking the balance between and motion with incredible user targeting, Watch as a destination unto itself versus capitalizing and that’s the holy grail.” upon the benefits of total platform integration is the Mike Henry, OpenSlate CEO challenge and opportunity. New York Times, December 2018 2. Give Creators a Reason to Believe Developing this ecosystem will require a heavy Scale and diversity of content will drive Facebook’s investment in creators. Facebook need not learn that success at growing time spent with video. Today the lesson on its own: YouTube has invested hundreds of video platform relies mostly on snippets of content millions of dollars directly into its creators — in originally intended to stop your thumb from scrolling addition to generating billions in ad revenue for them by in the news feed. This isn’t destination fare. — and it has paid off like no other bet in media history. But the content that people watch online also doesn’t In 2018, the number of YouTube creators10 earning five need to be highly-produced. Ad-supported content on figures a year is up 35 %, and those earning six figures YouTube is typically made for hundreds (not millions) are up by 40 %. YouTube laid the groundwork for this of dollars by influencers (not celebrities). Gaming, growing community with its 2011 acquisition of Next music and how-to videos make up the majority of New Networks,11 not to mention its impressive global what we watch on our phones. This content is not yet on Facebook at scale. 3 WATCHING FACEBOOK - How Video Ads Will Power the Social Platform’s Growth in 2019 investment in YouTube Spaces,12 a robust resource where TV budgets are spent. To reach video ad buyers, program for its creators. Facebook sellers will turn their attention to media agencies and invest in relationships with the teams who A healthy and happy creator ecosystem is the heart buy television. Adopting and understanding the and soul of social video. To attract creators, Facebook language, concepts and metrics in this space will be will focus on making it easier to build consistency, key to success. audience and revenue. Make It Simple Content creators will garner greater attention and When it comes to the video advertising landscape, investment from Facebook in 2019. The three pillars to simplicity is the ultimate competitive advantage. TV Facebook’s success here will be: buyers still spend $70 billion on a rough estimate of total reach and have moved money to digital most effectively • Attracting and supporting thousands of new where the inventory is simply traded. With massive scale native digital video producers — influencers — and diversity of content comes a requirement to develop, rather than focusing on content made for TV13 market and promote content packages. Connecting these • Delivering a consistent and sustainable revenue packages to TV buyers in a familiar light will be critical. stream to these producers (more below) • Making video content and creators more central to Make It Safe Facebook by rethinking how video is searched and For online video platforms, one of the biggest challenges discovered to gaining share from TV is advertisers’ lack of control over where their ads run. Facebook has already made 3. Give Brands a Reason to Buy massive investments in brand safety. The market will To truly capitalize on the opportunity before it, require greater visibility into the standards driving this Facebook will make a conscious effort to understand strategy and tools to make more discrete content targeting how brand advertisers are different from performance decisions on a client or campaign basis.
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