Facebook video ads: New online battle in the making?

After months of Internet chatter, Facebook has finally announced that it is testing auto-playing video ads. Though Indian brands seem excited, is it going to shift the balance of power in the digital

e4m by Abhinna Shreshtha
Published: Dec 23, 2013 8:52 AM  | 8 min read
Facebook video ads: New online battle in the making?

On December 17, 2013, Facebook announced that it would be testing its video ad platform for a select group. This follows from a larger test that has been going on since September to make Facebook videos more engaging, which, the company claims, has resulted in “more than 10 per cent increase” in views, likes shares and comments.

The new mobile ads will be available on the news feed for both mobile and desktop. The videos will begin to play as they appear onscreen, without sound. If the user does not want to watch the video, he/she can simply scroll or swipe past it. If the video is clicked or tapped and played in full screen, the sound for that video will play as well. At the end of the video a carousel of two additional videos will appear, making it easy to continue to discover content from the same marketers.

Facebook further stated that on mobile devices, all videos that begin playing as they appear on the screen will be downloaded in advance when the device gets connected to Wi-Fi, so the content will not consume any data plans.

Currently, Facebook has tied with Lionsgate to showcase the trailer of their upcoming film ‘Divergent’ as part of the test. It is not clear whether the company has approached any Indian advertiser as of now. Recently, Facebook reported that its revenues were up by 60 per cent over last year, buoyed by strong mobile ad revenues.

The Online Video Space Today
Before we delve into discussing Facebook’s video ad service and what Indian companies think about it, let us take a look at the online video space as it stands right now. A recent report by eMarketer estimates that YouTube will earn $1.96 billion in net global digital ad revenues (with the bulk coming from video ads) and also estimates the company’s revenues from just video ad formats will hit $1.22 billion next year, claiming a 21.1 per cent share of all US video ad revenues.

In terms of overall video content views (video ads not included) in the US, Google properties, largely due to YouTube, unsurprisingly lead the pack, garnering 163.5 million unique views with Facebook a distant third with 66.2 million views  (ComScore statistics for November 2013). When it comes to India, ComScore estimates that online video consumption has doubled to 3.7 billion videos/ month over the last two years, with the total online audience around 54 million. Google properties once again lead with 31.5 million unique views, followed by Facebook with 18.6 million views (figures as of March 2013).

It is in this scenario that Facebook is planning to enter its video ad service, as part of its on-going process to become a more viable option for advertisers.  So, the crucial question is: How successful can Facebook be with YouTube clearly miles ahead in every market? Will marketers (especially the Indian ones) find Facebook’s offering interesting? And what does this mean for the digital video ad space in the future?

exchange4media spoke to a few agencies and brands to get their perspective…

The Indian Perspective
Most of the brands we spoke to seemed very upbeat about Facebook’s offering, seeing it as another avenue for marketing and reaching their consumers. Speaking on the rationale behind Facebook’s move, Preetham Venkky, Business Head (Asia) of KRDS India, a French agency that specialises in Facebook marketing, said, “This is not unexpected. It was always a given that Facebook would enter the video ad domain soon and it makes perfect sense for them. If you look at the digital landscape today, most of the discovery is actually done on social media platforms, especially Facebook.” He cited the example of the Volvo-Jean Claude Van Damme ad that went viral recently, mainly thanks to extensive sharing on Facebook and Twitter. “Viewers go to YouTube to check out content videos, but they don’t go there to discover campaigns and advertisements,” he further added.

The main reason brands are looking forward to Facebook’s video ad platform becoming live is that Facebook offers a more targeted way of approaching consumers. “Facebook’s strength is its ability to target individuals,” said Jaimit Doshi, Marketing Head of Kotak Securities. “The amount of data they have on users is actually scary. It (Facebook video ads) will be a great platform for engaging consumers and we will definitely use it when it becomes available,” he added.

Similarily, Samsung, another brand which uses the digital medium extensively for marketing and advertising, expected good things from this development. “This is a great initiative taken by Facebook. They do understand that about 95 per cent of the content on Internet by end of 2014 is going to be video and promoted videos and Facebook is going to further propel this trend. For advertisers like Samsung it will be a great platform for reach, impact and engagement,” said Aman Malhotra, Digital Marketing Head, Samsung.

A few others urge caution. The Chief Digital Media Manager for a prominent BFSI organisation, who has prior experience of creating video posts on Facebook, said that since the posts start playing automatically, it might be considered intrusive by the audience. He also pointed out that automatic data consumption, if only on Wi-fi, might not go down well with viewers. “As a brand which has a large presence on Facebook, we will be ready to experiment with any new channels and platforms, but we might not be ready to take the additional effort of creating custom videos that get the message across without sound,” he opined. But, if Facebook users are going to see non audio videos on their timeline, then marketers will have to do exactly this.

Doshi, too, mused about getting the advertising right without getting intrusive and added that with Wi-fi hardly prevalent in India, it remains to be seen how Facebook overcomes this obstacle for India and other developing countries with the same issue.

In fact, quite a few media commentators have pointed out that auto-playing ads might be considered intrusive and it appears this is one thing that Facebook wants to evaluate through the trials. Interestingly, a survey carried out by SEO consulting firm Greenlight in July this year, stated that 15% FB users in the US were ready to pay to see no ads!

Do Other Players Need To Be Worried
It is very tempting to speculate that players like YouTube will see their market share cannibalised by this new competition. But, we must also remember that the digital space is growing rapidly every year, with digital marketing budgets consistently expected to outpace other media over the coming years. If advertisers get another option to spread their message, it is reasonable to assume that they will jump at it, rather than picking and choosing. Sanjay Mehta, Co-CEO of social media advertising firm Social Wavelength, agrees with this assessment. He feels that Facebook, with its user profile-based targeting will attract a decent share of video ads and will be a great competitive addition to the mix.

“There are ample opportunities for both (YouTube and Facebook). I think the online video space as a whole will grow even further post this,” opined Doshi. Another industry expert said that one being a networking forum and the other a video search platform, users were smart enough to choose their platform of engagement.

But, what about the smaller players? To take India, for example, the top video properties in the country, after YouTube and Facebook, are Yahoo, Vdopia, Komli, etc. However, they have a far, far smaller chunk of the total unique video views. (Yahoo!’s properties, for example, had around 8,000 video views in March 2013 according to ComScore, while Vdopia had around 6,000). How will the entrant of another big player affect them? “We might see advertisers divert some of their budgets allocated to the niche players to Facebook, if only to try out the new medium. However, these players do not compete with YouTube or Facebook in terms of scale. They have different features, so, though they will be impacted to an extent, I don’t think it will be too much,” said Mehta.

Piyush Chapperwal, National Sales Head for Vdopia compared it to YouTube’s entry into the digital space, which revolutionized the online video space. He says that he expected something similar to happen this time too with Facebook, which he feels will help the entire ecosystem, including players like Vdopia. “We had integrated social features in our video app but they did not take off. Hopefully with Facebook entering the market, it could mean that the concept of video advertisement on social media will receive a boost,” he adds.

It has to be noted that the project is still very much in the early stages and it is still not clear when and how Facebook’s video ad service will be available; globally and in India. Apart from the official announcement, Facebook remained unavailable for comment. If Facebook’s video ad service does succeed and becomes the dominant player in the digital space, it will be a cruel blow to Internet giant Google, which has struggled with social networking in the past with Google+ and Orkut. It will be interesting to see how this develops further.

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