Facebook tests mid-roll ads to monetize growing video strategy

Dive Brief:

Facebook is testing mid-roll advertisements on videos at the publisher’s discretion, according to Recode.
The ads can be inserted into videos at least 20 seconds after the start of a video, and publishers will receive 55% of the ad revenue — the same split offered by YouTube.
In related news, Ad Age is reporting Instagram is testing mid-roll video pop-up ads in its Stories feature. Currently, the test only involves select publishers and content creators.

Dive Insight:

Facebook users watch 100 million hours of video on the platform daily according to the social media giant, but its monetization strategy for video has been limited. Last year, Facebook allowed publishers to post sponsored videos and started testing mid-roll ads for its Live streaming offering, allowing for some revenue. Even though the social media giant has been heavily promoting video on the platform, the mid-roll ad units are the first more traditional ads for video clips.

Mid-roll ads give viewers a familiar, linear TV-like experience with video ads interspersed with original content. While the ad format is, by nature, disruptive — which could turn off some users — they have proven successful.

Research from last August reported in the Ooyala Video Index found that mid-roll ads had a 90% average completion rate. These results compared to 78% for pre-roll and 65% for post-roll, and mid-roll impression growth year-over-year at the time was 110% with pre-roll at 14% and post-roll at 74%. A case study in the report pointed to a Nordic broadcasting company that shifted its video ad strategy from all pre-roll which suffered from high drop off rates to all mid-roll, resulting in higher ad load and engagement. One argument for the mid-roll format is it allows viewers to become involved and invested in the video content before having to view an ad.

The news comes as Facebook and other platforms are reacting to strong growth in digital video by offering a variety of formats, challenging marketers to keep up with the different options. “For marketers, in particular, they need to experiment. You can’t just think about video as one thing — it is many things," Andrew Bosworth, VP of Advertising and Business Platforms at Facebook told C Space Studio at CES last week.