The below post is part of our 2014 Social TV Year-in-Review guest post series and is written by BRaVe Ventures Co-Founder Jesse Redniss.
Facebook in 2014 and the road ahead. A BRaVe outlook.
In 2014, there’s been a lot of noise about Facebook’s move into video content and the implications it might have. These implications aren’t just focused on the big media companies and the brands that have been jumping on the native content bandwagon, but also the indie content creators that are forming the next wave of the industry. With that, BRaVe Ventures wanted to take a moment to share some of our broad thoughts on what’s happening and what we can expect as we move ahead into 2015 and beyond.
Yes, it’s true, Facebook is poised to become the next big MCN and has clearly established one of the largest foundations to work from. With its recent rollout of searchable key terms and phrases, it’s never more apparent than now that Facebook plans to mine ALL of your engagement/posting/activity/liking history to start making better and more contextual/behavioral/affinity matches and then recommend great, engaging posts and videos to keep you in the stream. This rise of video on Facebook does have an impact on other platforms, and the trend everyone in the industry has been seeing with regards to Facebook vs. YoutTube is just how rapid and massive growth of video on Facebook; the increased use of the Facebook Native player is having a negative impact on referral traffic to YouTube players. Social Bakers insights report is just one of many white papers of late to showcase this trend.
What does this mean for Monetizing with Pre-roll? Post-roll? Mid-Roll?
That’s a big question that’s on everyone’s mind. But first, let’s take a moment and think about the “auto play” function on Facebook. There was a lot of criticism of their strategy when it was first introduced, but it’s not their last move. Auto play isn’t a new concept. In fact, you could even say that when you turn on your TV, it is an “auto play” format that could be content or it could be an ad – a total crap shoot depending on what channel you left your cable box on. It’s been tried and tested for years across a plethora of digital and social destinations. This, we believe, is going to be just one direction that Facebook goes in. We believe they will keep the auto play of CONTENT active in the stream. Once you engage with that piece of content and possibly expand to go full screen, they may interupt the content with a pre-roll. Seems logical right?
In true Facebook fashion, they will test this across various smaller groups of users to see the optimal mix of content with ads vs. content play without ads. Facebook is pushing so much volume right now that they can take their time to test and roll out various trials for the next year and still create meaningful revenue for 2015, while also playing the long game. They will definitely experiment with ad time as well, short form ads of four, 10, or 15 second durations to see what the abandonment threshold is for the content type (content type meaning comedy, drama etc., and duration). They will also update the Native player to make personal recommendations and auto play directly into more content, and continue to mix in mid-rolls into that experience. Are you sensing a theme here? Keeping you in the stream longer, getting you hooked.
As we’ve also seen with the recently-announced Facebook and NFL clip agreement, Facebook is going to run post-roll ads after each piece of content. Many would consider this to be the Facebook version of Twitter’s Amplify offering. But, with this, there is the term that not even the IAB and 4A’s can agree on: viewability. Will consumers really stick around to watch a POST ROLL? Will it count as a viewable impression? Much to be explored here and nobody has the answers yet.
Beyond ads, what else should we expect to see on Facebook in terms of video content?
Further out, we believe they will start matching brands, media companies, talent and creators to encourage more of the branded video approach that so many MCNs and TV networks have been executing on. The potential of Fabebook Open Graph insights to influence brand matches with content is very powerful, and leveraging the Facebook network to target that “created with” content to an audience on a one-to-one basis is the next frontier of monetization and personal video experience. It must feel extremely gratifying to have the power to offer both the “one to many” and “one to one” approach. Many would even say that it’s a killer combination of the next generation Gross Ratings Point that can deliver scale, reach and personalized targeting.
We believe they have been experimenting with building video content channels for a while now, but at a very small scale and focused on single content deployment use cases. There are a number of executions to cite as examples: Jerry Seinfeld videos, David Muir’s (ABC News) ‘The One Thing,’ even the Foo Fighters Sonic Highways live stream with HBO. Now, a distribution and monetization deal with NFL and Verizon.
Will there be YouTube-type channels on Facebook?
In regards to building and programming “channels,” we think they will start moving into this space soon. The HBO and ABC News activations are just two examples of Facebook slowly engaging with media companies to showcase how they understand their community and can work hand-in-hand together. But, it’s also all about the revenue split. As we all know, YouTube has a hefty revenue share ask of 45%. Imagine if Facebook went to the media companies and advertisers offering a 75/25 or 70/30 split and coupled that with Facebook marketing credits toward activating and targeting affinity audience across it’s network. Yes, BIG. But not just on Facebbook, but targeting across Atlas, Instagram, and LiveRail. Facebook seems to be more fully “end-to-end integrated” than YouTube, Google Search, Android, and G+. This is that killer combination we were alluding to – next generation GRP.
What would this mean for the YouTube Video ecosystem?
Well, there are a lot of ways that this can go. One of them is that this could cause an all-out content and talent arms race. YouTube has the apparent upper hand right now. But Vine, Instagram, SnapChat, GoPro, Twitter, Vimeo, Vessel and Facebook (and many, many others) have been chipping away at the armor and Facebook has the scale to expose an achilles heel. In the end, it’s not an either/or situation of choosing which single platform to be on, but more about an all strategy – being where your audience is while maintaining the best rights and revenue share possible.
After all, this is the brave new world that we operate in.