Within five days, Candice Payne (you know, Chewbacca Mom) went viral with 140.7 million views on her Facebook Live broadcast where she showed off her cool new Star Wars mask.
It was a monumental moment for the platform which delivers 4 billion video views with users watching 100 million hours of video per day. There has been a 400 percent increase in videos published by people and brands over the past year on the platform.
Live video has been a very successful enterprise for Facebook, and now it appears that Facebook is going to cash in. Several news stories have confirmed and rehashed the news of this new development. It’s still being tested, but here’s what we know right now:
Facebook confirmed to AdAge earlier this summer that it was beta testing live video ads that are 15 seconds or less and inserted into into live video broadcasts at the 5 minute mark or later. “We’re running a small test where a group of publishers have the option to insert a short ad break in their Facebook Live videos,” Facebook wrote in an e-mail to AdAge.
Brands have been able to opt out of the test run. “We wanted to opt out immediately, because there was no reporting on how well it does and you don’t have control over where the commercial shows up,” an agency executive anonymously told AdAge.
It’s still unclear whether the creators of live video content will have the ability to set a designated “commercial break,” during which all viewers see an ad simultaneously, or if Facebook will place an ad randomly during a Live stream, writes Fitz Tepper for TechCrunch. The “commercial break” would be preferable to content creators because they can choose when to pause the live-stream, instead of being cut off mid-thought. Consumers would likely prefer this as well.
It’s also unclear whether content producers would receive a portion of the revenue generated from ads during their Live broadcasts, but Facebook has already invested $50 million in contracts with celebrities and media brands to create content exclusively for Facebook Live. More than 140 video publishers, including Kevin Hart, Gordon Ramsay, BuzzFeed, CNN, the New York Times, Mashable and Huffington Post have signed on, according to the Wall Street Journal. This says nothing of the many other producers not under contract who could possibly see a piece of the ad revenue.
“Thought you could avoid ads by cutting the cord? Think again,” writes Gina Hall from Silicon Valley Business Journal.
Garrett Sloane from AdAge writes that it’s been in the plans for a while. “The social network has indicated for months that there was a possibility of introducing commercial breaks during live-streams, and head of product Fidji Simo touched on the opportunity in a forum in June,” Sloane writes. He also points to Facebook’s investment in live content from celebrities as proof that this is going to continue beyond the testing stage.
Notwithstanding its $50 million investment in top-of-the-line producers, its untold how Facebook may benefit financially. Though we can assume that the company stands to make an amazing profit if it irons out any kinks in this ads-during-live-video service. With its foray into video thus far, Facebook has made a healthy chunk of change. In April, the company reported its ad revenue had jumped in the first quarter of 2016 by 57 percent to $5.2 billion, up from $3.3 billion.
CEO Mark Zuckerberg is content with the direction his company is taking. “We’re particularly pleased with our progress in video as we move towards a world where video is at the heart of all our services,” Zuckerberg has said.
Facebook COO Sheryl Sandberg on the company’s earnings call in January: “What really matters is that consumers are using video on Facebook. We’re already seeing pretty explosive growth without that kind of premium content in the system in large numbers, and so we’ll continue to figure (that) out.”
The success of this new ad service depends on brands creating unique ad content for it, if you ask Chris Tuff, director of business development at 22squared, which AdAge did. He noted an example of the perfect live stream that could have included ad content to reach a major audience: When actor Vin Diesel streamed a behind-the-scenes look at the eighth Fast and Furious movie in late July. “Vin Diesel just hit 100 million followers, which is crazy, so imagine they run mid-roll ads for the film he’s starring in. It makes perfect sense,” Tuff told AdAge.
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