Publishers say Facebook’s rollout of Watch ads is methodical but picking up speed

BuzzFeed’s
Tasty Presents is a long-form Watch show.
Tasty

• Facebook wants to be known as a hub for video and is
  betting big on Watch as a way to drive habitual
  viewing.
• Facebook is steadily rolling out ad breaks within
  videos to give creators a chunk of revenue — most recently with
  tests of pre-roll ad formats.
• Publishers say that they’re beginning to see revenue
  potential from the program but stress that it’s been an
  intentionally slow process.

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Facebook is still trying to train people to purposefully head to
the social network for video.

And more recently it’s been trying to teach them that ads are
part of the deal — while gradually helping publishers make a few
bucks.

A year into launching Facebook Watch — the dedicated video tab
that contains entertainment and news shows — Facebook is leaning
heavily on publishers by funding content for the platform. Those
shows
run the gamut from a vertical-oriented version of Anderson
Cooper’s CNN news show to “Ball in the Family,” a reality show
that follows Los Angeles Lakers point guard Lonzo Ball and his
family.

“When people come to the tab, they’re regularly coming
back”  said Kate Orseth, Facebook’s media monetization
product marketing director. “That stickiness behavior is really
important to make sure that [Watch] is driving loyalty behavior.”

Now, some publishers say that they’re beginning to see real —
albeit small in the
realm of total digital ad dollars — money-making potential
from Watch as Facebook
is testing more pre-roll ads while also adding more video to
run ads alongside.

That’s potentially providing a much needed boost to media
companies producing video for Facebook.

At the same time, video inventory is critical for Facebook as it
looks beyond its massive newsfeed to make money, which Facebook
execs stressed to investors
during its recent earnings call.

“There’s diversification within Facebook as a platform that I
think is exciting and offers new opportunities to connect with
audiences in different ways,” said Ken Blom, VP of branded
distribution at BuzzFeed.

“Ball in the
Family.”
Facebook
Watch

Facebook is intentionally easing into Watch advertising

BuzzFeed is part of a small test of publishers experimenting with
selling some of its own Facebook video inventory. In most cases,
Facebook fills the inventory programmatically and uses a tool
that can automatically detect the best place for an ad break
within a video.

With Watch, publishers make money from pre-roll and mid-roll ads
that run either before or during a video. Facebook also offers a
“non-interruptive” ad format with cards that pop up on the screen
while a video plays.

All three formats fit under Facebook’s ad breaks initiative,
which is a revenue-share program that lets publishers keep 55% of
ad revenue while Facebook keeps the other 45%.

In recent months, Facebook has steadily upped the number of ad
breaks served to videos. To qualify for ad breaks, videos must be
at least three minutes long and a mid-roll ad cannot run until
the one-minute mark.

However, Blom and other publishing execs stress that Facebook is
not going crazy with stuffing ads into videos. Unlike Facebook’s
newsfeed, where publishers rack up millions of video views
instantly, Watch generates significantly smaller audiences.
BuzzFeed’s main page for Tasty, for example, has more than 94
million followers while its show Tasty Presents has 1.7 million
followers.

“It’s not an insane ad load to where it would drive users away
but if you’ve watched two or three minutes of video, we hope in
the Watch environment that you’re going to stay on what’s next,”
Blom said. “Facebook will talk about ‘intentionality’ as the
metric that they think about for Watch.”

Oren Katzeff, head of programming at Tastemade, called the
rollout of ads “methodical” and stressed that its slate of Watch
shows appeals to a different set of users than those who scroll
through the newsfeed quickly.

“Over time, as the demand does increase and the audience does
increase, we’ll be perfectly positioned,” Katzeff said about the
publisher’s
weekly rotation of shows.

Publishers see pre-roll as an important step for Watch

Facebook has long eschewed pre-roll ads in its news feed. The
company has resisted hijacking that scrolling experience with
autoplay ads.

Pre-roll ads are viewed as more acceptable in Watch, where people
are likely choosing to watch video.

To be sure, the current test with pre-roll ads is small and is
limited to videos that consumers find by searching for specific
shows or Pages.

According to Katzeff, opening up pre-roll suggests that Facebook
is serious about working with publishers to create high-quality
video content. Unlike mid-roll ads that often jarringly interrupt
video content, pre-roll is easier to design programming around —
as long as consumers are willing to sit through an ad first.

“For the most part, the mid-roll experience was positive but it’s
much harder to create content that has a very natural mid-roll
point,”  Katzeff said. “With pre-roll,
we’ve started to step up our efforts now that we’ve seen it kick
in.”

Facebook needs Watch to work as a new revenue stream

Still, getting people to shift from scrolling through the
newsfeed to seeking out videos is a tough challenge and is part
of Facebook’s move to make money outside of the newsfeed, which
also includes ads in Stories, Messenger and WhatsApp.

Non-newsfeed ad placements aren’t as lucrative as the newsfeed
for Facebook. According to another exec at a large publisher,
video ads within Stories generate a $8 cost per thousand
impressions (CPM) while newsfeed ads generate roughly a $16 CPM.

“It is critically important for Facebook to get this right and by
the day it gets more difficult,” said the exec.

Plus, Facebook has a well-documented and rocky history when it
comes to working with publishers, which could make its
relationships with media companies difficult. Tension between
publishers and Facebook has existed in everything from changes to

Facebook’s direction in its content strategy
to algorithm switches over the years.

With Watch, publishers are leaning on personality-driven programs
but some efforts have proved to be more successful than others.

Execs point to programs like “Red Table Talk” and
“Ball in the Family” as successful programs that rack up
engagement and views. For example, “Red Table Talk” — a talk show
hosted by Jada Pinkett Smith, Willow Smith and Adrienne
Banfield-Norris — has three million followers and regularly
accumulates millions of views per episode. “Red Table Talk” also
uses polls, hosts a Facebook Live each week to answer questions
about the show and has a Facebook Group to engage with fans.

Meanwhile, “Loosely Exactly Nicole” — a program hosted by
comedian Nicole Byer that Facebook picked up from MTV —
was cancelled after two seasons aired on Watch.

According to the exec, it’s unclear how much money Facebook is
making back on its Watch investments — partly because its budget
for original content is significantly smaller than Netflix, Hulu
and others that shell out billions for content. Netflix is
expected to
spend more than $8 billion this year while Facebook will
reportedly
pay between $1 billion and $2 billion.

“You cannot do this on the cheap,” the exec said.