Facebook Stories to test ads as user count tops 150M

Brief:

Facebook’s clone of Snapchat’s stories format has grown to 150 million users in the past 14 months, and the social network now aims to monetize that audience with ad sales. Facebook Stories this week started testing the first ads in the U.S., Mexico and Brazil, per TechCrunch.
Facebook Stories ads are 5- to 15-second videos that users can skip, and the company plans to add call-to action-buttons in the coming months. Advertisers can port their Instagram Stories ads to Facebook Stories ads, or ask Facebook to reformat their News Feed ads automatically with matching border colors and text at the bottom.
Facebook Stories users also can now shoot 360-degree photos without the need for a specialized multi-lens camera. The feature has an interface that shows users where to “paint” the camera over their surroundings, letting them fill in missed spots instead of taking a continuous shot like a panorama.

Insight:

Facebook Stories ads are similar to those on Instagram, with a full-screen format that isn’t found in News Feed ads, per Adweek. The larger format is likely to appealing to brands because of the potential to make a bigger impact. Some are likely to embrace the change by posting more content as Facebook Stories, just as they did with Instagram Stories. Among 100 brands tracked by agency Block Party in March, 79 used Instagram Stories while only seven used Facebook Stories. The agency this week found that seven of those 100 brands posted Facebook Stories in a 24-hour period.

Facebook’s chief product officer, Chris Cox, this month said Stories will surpass feed posts as the most popular way to share user-generated content by next year. That makes Stories a key part of Facebook’s efforts to maintain ad sales. During the company’s Q1 2018 earnings call with investors, CEO Mark Zuckerberg said Facebook must ensure “that ads are as good in Stories as they are in feeds. If we don’t do this well, then as more sharing shifts to Stories, that could hurt our business.”

Facebook has been effective in beating back competition from Snapchat by copying the Stories format that lets users string together a series of pictures and videos in a single post that disappears in 24 hours. Facebook Stories took a little more than a year to reach its current audience size of 150 million users, while the company’s total audience has grown to more than 2.2 billion. Snapchat’s growth has decelerated, rising by 2% to 191 million users in Q1 2018 from the prior three-month period, while Facebook managed to eke out 3% growth.

The expansion in Facebook's ad offerings comes at a time when the company is still dealing with the fallout from the Cambridge Analytica data scandal. Consumers and brands are likely to be closely watching Facebook's efforts to be more transparent about the kinds of data it collects about users, although so far there does not seem to have been a significant impact on social media giant's user growth or ad sales.