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Facebook To Share Ad Revenue

Look out, YouTube, there’s another pony in the race. Facebook — who never does anything by half measures — may soon be breathing down your neck.

Last month, Facebook rolled out Suggested Videos. These algorithmic auto play ads are a new way for the social media giant to attract advertisers and begin to chip away at the Goliath-sized digital monopoly long enjoyed by YouTube.

In 2014 alone, YouTube generated roughly $1.22 billion in revenue from video ads. Facebook would like a slice of that pie.

Facebook claims twice as many people watch video on their site today as compared to six months ago. They receive more than four billion daily video views.

Facebook’s primary source of income has long been digital advertising. So what prompted them to consider a shift from traditional advertising to video advertising?

According to Facebook COO Sheryl Sandberg, “People love the format of video. It’s long been used to reach people in a compelling way, and we can do targeting in a way that’s really unique.” Sandberg added that the new Facebook ads were a large contributor to the company’s second quarter 2015 earnings.

Suggested Videos use a partnership model that divides money with content providers. The split — which matches YouTube’s numbers — includes 45 percent for Facebook and 55 percent for the video creator. Some of the first major names to sign on as content providers include: NBA, Tastemade, Fox Sports, Hearts and Funny or Die.

Here’s how the videos work:

When you click on an item in your Facebook news feed, you’ll be redirected to related video content. These videos begin playing automatically, with the sound off, so as not to annoy users. Once the desired ad is seen, it’s played with the sound enabled. In other words, these targeted ads are tough to ignore.

The monetary marketing details have not yet been inked. However, the current Facebook method is to charge for videos based on impression or page views that last at least 10 seconds. A Facebook spokesperson says they’re in the process of running a monetization test to see what makes the most sense.

So what does this all mean for you as a small business owner? Well, it’s early days, but it still makes sense for you to learn more about Sponsored Videos. Go on Facebook and experiment a bit with these videos. See what you like; see what you don’t. Then consider how these videos might help you boost your business in the future. Metro Studios is always here to answer your questions and help with all your social media needs.

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