Facebook made its play to rival YouTube's video ad business on Wednesday, unveiling a plan to monetize videos and share the revenue with creators.
Menlo Park, Calif.-based Facebook will launch a new Suggested Videos product, which will curate content from a select group of early partners including the NBA, Hearst, Tastemade, Fox Sports and Funny or Die. The product, launched on iPhone, is geared toward a mobile audience, though Facebook will roll it out on other devices.
The Suggested Video feeds will include ads that will play between the videos. The revenue for the ads watched will be split among all the videos viewed during a single session, with payouts determined by how long a viewer spends with each video. As with YouTube, the revenue split will be 55 percent for the creators, and 45 percent for Facebook.
Adweek spoke with Patrick Starzan, vp of marketing and distribution for Funny or Die, about being one of the first companies to partner with Facebook for this service and how they look to create videos for what he calls a "lean back" audience.
Why did you guys want to be among the first companies to test with this service? Is it about the buzz of being first?
Starzan: It's a little about being a part of that. As a content publisher, we really see more and more that people want to view content on the platforms that they're on. Less and less people want to click out of their platform to go to a publisher's site and then come back in.
Eventually, people are going to want to just consume content on the platform, which makes sense. Optimally, for us, we want to showcase our content and get as many eyeballs as possible. The rub for us though has always been we can't monetize on the platforms. It's not a good business case for us to just upload all of our content to Facebook and have everyone stay there. To be a part of this is beneficial to us because now we can test out monetization at the platform level and see if it makes sense for us.
When we have uploaded our videos to Facebook and tested inline viewing, the engagement is off the charts in terms of total views and total engagement on the content.
What was Facebook's pitch for this?
It was pretty simple. They said they wanted to work with a couple premium publishers. Funny or Die was an early adopter of Facebook. We have over 11 million likes, so we're well-versed on the platforms and obviously uploaded a lot of content.
They just came and asked if we wanted to be part of the beta to test out monetization and that was a pretty simple "yes" for us.
How much, if any, will this increase the amount of videos you publish on Facebook?
We will continue to publish probably the same daily amount that we already do. We post between 6 to 12 times a day, and about half of those posts are videos. That will remain the same.
But we will test putting on part of our catalog from the site. That won't necessarily just go up as we post it on our page, but we will upload through an API or something like that. How many is yet to be determined. But we'll figure out the right amount to put up there.
How much more of an investment will it be to make videos specifically for Facebook?
Since we'll be using a lot of our back catalog, it won't be any more investment to us in terms of creating specific content for the service. The new content that we'll be putting up will be the same content that you would see on the site. As we grow and learn in this program, we'll probably start tailoring content to the Facebook audience that makes the most sense within the product.
When you start tailoring content to that audience, do you see it being that much different than what you already have, since this service is more geared towards the mobile audience?
Yeah. What you see now with videos on Facebook that are being tailored to Facebook, it's a lot of trying to capture your attention within the scroll and with the sound off. You'll see a lot of content producers doing those quick cuts in the beginning with a lot of eye-catching copy to bring you into the video. We would start testing that.
This product is different than just being in your newsfeed. It's bringing you into a lean back video viewing experience. We'll have to see—once people get into that experience of watching multiple videos at one time—how you'd really structure the video for that experience.
How does this impact ability to reach mobile consumer?
It gives us a great advantage of meeting that mobile consumer, the size of Facebook. You've read the stats: 4 billion video views a day, and 75 percent of that coming from a mobile audience. It will have a tremendous value on increasing our reach to the mobile consumer.
For now, Facebook has said they won't allow their partners to sell video ads. What if anything, did they say about allowing this in the future?
We haven't really talked about any of that right now. Everyone is just kind of figuring out what the product is going to be and what the user experience is going to be first.
They still have a little ways to go to figure that out before we get deeper into who is going to sell what and what the revenue structure is going to look like. That's down the road. Right now it's about figuring out and testing the product itself.
Have you had any conversations with your ad partners that this might be a possibility sometime in the future?
We have not. We literally just started talking about this recently. Once we get into it we'll start having those conversations.