Launched in August 2017, Watch is an effort to get more long-form episodic shows on to Facebook in hopes of capturing more video advertising revenue from leader YouTube. Early shows on the service have included “Comeback Kids” by digital media company The Dodo, and “Struggle Meals,” which shows users how to cook meals for under $2. Digital video advertising was a $5.2 billion industry during the first six months of 2017, according to a report from the Interactive Advertising Bureau.
Facebook said in December 2017 it will add commercials before videos, a first for the platform. At the same time, to make sure users stay engaged, Facebook is requiring videos to be at least three minutes long to qualify for ads in the middle of them, and those ads can appear only after 60 seconds of content. Previously, videos only needed to be 90 seconds to qualify for ad breaks, and an ad could appear after only 20 seconds.
Facebook also hopes the move to long-form video will keep people on the site longer. Last quarter the company said time spent on the site was reduced by 50 million hours per day, partly because of News Feed algorithm changes.
Google has provided an opening for Facebook as it clamps down after an advertiser backlash over ads appearing next to inappropriate content. To combat the problem, in January it announced a revamp of its advertising program Google Preferred, which allows companies to buy ads on its top “safe” videos. Under the new rules, a human must review every single video that qualifies for the program. It now also requires creators to have 4,000 hours of “watchtime” over a year and more than 1,000 subscribers in order to earn advertising revenue, as opposed to a previous threshold of just 10,000 lifetime views.
Media agencies say their clients are excited about the prospect of video advertising on Facebook, but most of the money is earmarked for buying sponsored placements in the News Feed rather than Watch ads. Brands are hesitant about advertising on Watch, and are particularly concerned about where their ads might appear, because Facebook category designations are extremely broad.
Expanding Watch to more creators will make it harder for Facebook to vet content, they note.
However the company told two buyers it is thinking about allowing the purchase of specific shows starting in Q2. The method, which is similar to how television is sold, could be a way to weed out lower-quality shows — which won’t earn ad revenue — and may convince advertisers to spend similar amounts of money as they would on television commercials. Facebook also seems to be considering creating a tiered advertising system, similar to YouTube advertising program Google Preferred, one source noted.