The Precise TV Blog

Putting video advertising into context

Nadav Shmuel

By Nadav Shmuel

April 10, 2018

ONLINE VIDEO ADVERTISING IN 2018 PART 1: FACEBOOK

Video is now the dominant form of online advertising, and it’s continually evolving. In the first of our ‘Online video advertising in 2018’ series we look at what the next 12 months holds in store. Starting with Facebook, we explore what marketers should look out for when planning their online advertising strategy.

The moving image has long been the dominant form of communication for advertisers looking to build their brands. What began in TV has moved online – and at huge scale.

With publishers’ well-documented ‘pivot to video’ during 2017, Facebook and Google continuing to invest heavily, and with the likes of Amazon and Snapchat making inroads, online video is the only game in town. According to eMarketer, online video growth is expected to grow from roughly $13 billion in 2017 to over $22 billion by 2021 in the US alone.

All this video consumption is happening on multiple platforms that offer very different customer experiences. So, given all the available options, what are the key developments a marketer must consider when deciding where to spend their precious marketing budget?

In part one of our ‘Online video advertising in 2018’ series, we look at how Facebook is shaping up in 2018.

FACEBOOK’S GLOBAL REACH

There are of course any number of possible social media sites for advertisers to choose between – from Twitter and Snapchat to Pinterest and Instagram – each with their own unique attributes. Snapchat and Twitter in particular are facing pivotal years.

However, with over 79% of US adults on the site and over 2 billion active users worldwide as of 2017, Facebook is by far the largest social media site. What Facebook does will have an impact throughout the market.

For marketers, the best aspects of Facebook are its phenomenal reach and its highly granular audience based targeting. However, the platform does have its issues too.

First of all, while their targeting can be excellent, Facebook can suffer from viewability problems and even some major miscalculations in their reporting.

For example, throughout 2017, Facebook reported a number of issues with their video advertising measurement. These ranged from inflated like and share counts, through to overestimated video ad completion rates. Worst of all, they over-reported total number of video views for a two-year period, sometimes by up to 80%.

And this was all before the issues of fake news started to raise its head, creating brand safety concerns.

To their credit, Facebook came clean and were transparent with the measurement anomalies as they were discovered. As part of their response they agreed to allow more third-party verification tools onto their platform.

However, in a way this only led to even more trouble when it emerged that viewability rates on video advertising was often as low as 20% – and sometimes even less.

NEW YEAR, NEW INITIATIVES

In order to improve their video products and deliver greater value for advertisers while retaining a tolerable user experience, Facebook have introduced a number of new initiatives.

One of their main issues is that the News Feed, where most of the video advertising currently appears, is essentially a passive medium. If they force too many video ads with pre-rolls, the interruption will cause many to abandon the platform. If they use mid-rolls then the experience might be better, but by and large most users will have scrolled away before seeing the ad, which limits viewability. This has resulted in a major headache for Facebook.

In order to improve the user experience, Facebook have made a concerted effort to remove brand content from within the news feed. Instead they have launched Watch, a YouTube-style video hub that’s much more intent-driven than the passive News Feed. First introduced in the US in mid-2017 and monetized with mid-roll ads, the plan is to introduce pre-rolls during 2018.

However, unlike YouTube, which mainly uses skippable TrueView, these pre-rolls will primarily be unskippable six-second bumpers ads. It’s still early days with this format, but in initial tests Facebook reported that these yield excellent brand lift results.

WATCH THIS SPACE

But Ad formats aside, will Watch succeed as a consumer proposition? From some quarters there has certainly been much criticism over the user experience and the ability for audiences to easily navigate to the channel.

However, according to Morgan Stanley early signs have been encouraging with 40% of US users saying they use Watch weekly. Morgan Stanley went on to say they were “frankly surprised” at how quick adoption has grown and view this as potentially the next big growth area for Facebook.

Clearly, Facebook are pulling out all the stops to get their online video house in order. In fact, they’re even going so far as teaming up with Simon Fuller of American Idol fame to launch a new social video drama called “Shame” aimed at teens. This concept has already been hugely successful in Norway and some commentators believe it could be the next big entertainment format. If successful, it could change the game, creating a whole new social video viewing experience. Not to mention some valuable new inventory for advertisers.

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