Facebook Wants Better Video Ad Engagement

Facebook might be slowing down when it comes to video ad impressions and its “ad load” warning -- especially when it comes to mobile video advertising growth, according to company executives.

Well, who likes a glutted video market anyway? Just ask traditional linear TV advertising buyers and sellers.

Facebook reported another quarter of high stellar growth, up 47% to $9.1 billion in advertising revenues ($9.3 billion overall) in the second-quarter 2017. Net income growth grew 71% to $3.9 billion.

Overall, Facebook says advertising loads -- the number of ads its users see in all formats -- will be “less significant” for its future advertising growth. Translation: The saturation point is near for its individual ad messaging.

And then there is video.

David Wehner, CFO of Facebook, said during the earnings phone call: “We expect our strategic focus on driving engagement with mobile video may slow advertising impression growth, given the relatively fewer ad impressions in video than Newsfeed.”



How does Facebook intend to do better? Higher engagement of that content, which hopefully stirs the pot for it to charge more money for those specific ad opportunities.

The market for overall digital video looks to rise around 20% in 2017 to $11.7 billion, according to eMarketer. Facebook and Google command the two largest shares of this revenue. Overall, Facebook is on track to pull in around $40 billion in revenue this year.

But metrics stand in the way -- as well as other issues. Facebook has admitted to misstating a key video metric for more than two years, artificially inflating the numbers around video views.

Perhaps some issues might be resolved if the social network could look a bit more like a TV network.

Facebook is investing in more “episodic” content,” COO Sheryl Sandberg told CNBC. That means longer TV-like video content, which in turn, might increase advertising engagement.

Many marketers claim linear TV’s continued strength comes from its stable TV messaging efforts around its programming.

During the upfront market for 2016 and 2017, linear TV sellers spent much time slamming digital video platforms when it came to issues over viewability, fraud and general measurement issues.

The result? Two years of somewhat unexpected modest single-digit percentage growth in linear TV upfront revenue volume.

Do digital video players like Facebook and Google need to pull back a bit on their video efforts in order to siphon off future TV gains?

2 comments about "Facebook Wants Better Video Ad Engagement".
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  1. Ed Papazian from Media Dynamics Inc, July 27, 2017 at 6:09 p.m.

    I'm afraid that many of the ad "impressions" that are being bought in mobile may not be "viewable" in the eyes of most TV advertisers so the ad revenue estimates, which do not tell us what types of advertising they represent---branding, direct response, search, etc----are rather misleading. As for more "engaging" content being offered by FB, Google, etc. if this means TV-style long form content---like sitcoms and dramas---how will they get mobile users to sit still for such sustained exposures? If more "engaging"content means something else---like  better produced  5- or 10-minute user- made videos, or stuff put out by independent producers operating on low budgets---this may be better than much of what's out there now, but hardly TV quality. I quess that we will have to wait and see what transpires.

  2. James Smith from J. R. Smith Group, July 28, 2017 at 11:32 a.m.

    Yes for these digital platforms long-form might be able to generate greater engagement but as Wayne noted...there's a glut or at least too many copy-cat long forms.  

    There is an argument to be forwarded about the "library" value of owning long form rights and revenues from product placement etc.  Over the years that's helped channels like HBO and of course the studios.  But what happens if these digital channels invest in long-form that turns out "not" to be "evergreen?"

    Ed's point about mobile and viewer's short attention span (i.e., producing mid-length high quality product) is well taken.  

    And then there's sports and to some extent news...but that's best left for another day.

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