Facebook has taken a big step toward making its advertising platform even stronger.
On Monday, Facebook announced it will help marketers sell and place”in article” and “in stream” video ads on its “Audience Network,” which includes thousands of third-party applications and websites. The move marks the first time Facebook is selling video ads on its Audience Network on the desktop web and the first time the social media giant is offering a video ad product on its Audience Network directed at brand advertisers. Marketers have the option to expand video ad campaigns from Facebook and Instagram to the Audience Network.
The Menlo Park, Calif.-based company first started offering video ads on its Audience Network last summer. However, those video ads were restricted to mobile apps and were “direct response” ads, in which an advertiser pays when the user takes an action such as downloading an app. The new Audience Network video offerings are designed largely for brand advertisers who want ads to be viewed to boost brand awareness and recall. A big reason advertising on the Audience Network appeals to marketers is because they can use the rich data Facebook gathers on users through its flagship app to target users across the Audience Network. For now, marketers can only direct their ads to the groups of users they would like to reach and not to specific websites or types of publishers, such as Daily Mail and USA Today Sports Media Group, which are part of the network.
“Advertisers want their videos to reach more of the right people in more places,”Facebook said in a blog post. “That’s why today we’re extending Audience Network to include videos from advertisers looking to drive brand outcomes. Now, in addition to watching these videos on Facebook and Instagram, people will view them on the other apps and sites where they spend their time.”
The Audience Network originally launched as an in-app mobile ad network two years ago, focused on image and video direct response ads. Over time, Facebook has been evolving the Audience Network to capture a bigger slice of brand budgets. The “in article” video ads can be displayed within “Instant Articles,” which publishers have given Facebook permission to host directly on Facebook to enable a faster, and in some cases, more visually stunning reading experience. The “in article ads” can last up to 20 minutes and begin playing automatically when at least half of the the pixels are are in view. Viewers must tap to opt-in for sound. The new ”in stream” video ads can play before, after or during the video content publishers place on their apps and sites across mobile and desktop and can last between 10 and 30 seconds. Advertisers have the option to pay a premium to only be charged for video ads that are watched for at least 10 seconds.
Facebook’s move to sell video ads on behalf of other companies should help the social media giant compete with major advertising companies such as Google and a host of advertising firms that sell video ads on publishers’ real estate at a time when digital video ad spending is rising. U.S. digital-video ad spending is expected to grow 28.5% this year to $9.84 billion, according to forecasting firm eMarketer. In the past, Facebook has taken approximately 30% of total advertising revenue from the Audience Network, with publishers taking the remainder. Facebook did not respond to a request for comment on the share of ad revenue it claims from the Audience Network at the time of publication.
Facebook said that early tests suggest that advertisers have a lower cost per view by allowing their videos to be shown across Facebook, Instagram and the Audience Network. Video is a growing area of focus for Facebook. The company recently expanded live video tools to all users and has paid some media companies to publish live video projects. The company said about 100 million hours of video are watched on Facebook daily, and video viewing time on Instagram has increased by more than 40% in the last six months.
Facebook has said fourth quarter 2015 sales of its Audience Network had an annualized rate of $1 billion. During the company’s recently reported first quarter, Facebook’s total revenue rose about 51% to $5.38 billion, driven by mobile ad sales. Monday’s update follows Facebook’s announcement last week that it is extending Facebook’s popular retargeted ads to Instagram for the first time.