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?