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Facebook Video Ad Spends Rising
The third quarter of 2015 marked the first time spending on Facebook video ad spending topped spending on photo ads, according to SocialCode, a Facebook Marketing Partner.
SocialCode attributed the surge in Facebook video advertising by its clients to the social network’s introduction of target rating point buying for video ads, which enables advertisers to buy Facebook ads much in the same way they purchase spots on television.
The company found that Facebook video ad spending accounted for 29% of its clients’ Facebook ad spending in the third quarter, up from 23% in the second quarter of 2015 and from 14 percent in the third quarter of 2014.SocialCode added that advertisers spent 206% more on Facebook video ads during the first three quarters of 2015 than during the same period in 2014.
With a quickly growing and engaged community of more than 400M, Instagram is one of the world’s largest mobile ads platforms & Instagram advertising is a lucrative option for businesses.
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Like many major marketers, Reebok wondered where its digital video ad dollars might be better spent—Facebook or YouTube video —and it partnered with Pixability to find out. The company tested its campaign by Venables Bell & Partners, featuring NFL player J.J. Watt endorsing the ZPump Fusion sneaker.
The results showed combining YouTube and Facebook buys is the most effective method for marketers.
YouTube had a higher video view rate (23.6% of people who scrolled past the video viewed it versus Facebook’s 5.4%) and video completion rate (20.4 percent versus Facebook’s 4.5 percent) as well as a lower cost per view. But Facebook had higher engagement.
“You want to meet the needs of the consumer. It depends on the time, where they’re going to be able to watch it, when they watch it,” said Jessica Ruscito, Reebok’s director of U.S. media and digital branding. “You want to make sure any time that a consumer wants to engage with your brand, you’ve got the content to deliver upon that need.” Pixability and Reebok noted it’s hard to make a direct comparison between the two platforms since Facebook’s “interactive elements” (Likes and Shares) are “simpler, easier to understand and take up more screen real estate.”
Facebook Hits 8 Billion Video Views/Day, Challenges YouTube
Did you know?
- More than 1 billion people use Facebook every single day
- 1.39 billion people now use Facebook on mobile devices, including more than 1 billion on Android
- There are 8 billion daily video views on Facebook
- More than 500 million people watch videos on the site daily
- In September 2015, over 1.5M small businesses posted video to Facebook, including native uploads and video ads.
Zuckerberg wanted to make it clear that Facebook is focused on investors, who are focused on advertisers, who are focused on reach – particularly mobile reach. It’s clear that he wants video advertisers to use “views” as a standard metric, even though comparing YouTube views and Facebook video views is like comparing apples to oranges.
Zuckerberg also stated that new video tools for Facebook pages are live, and that the site has been testing a dedicated video section. He confirmed that:
“Over the next few years, video is going to be some of the most engaging content online. And by continuing to innovate here, we have a chance to build the best place to watch and share videos”.
Yep, he just declared war on YouTube, which allows over a billion people to discover, watch and share originally-created videos. The big difference between the two is YouTube focus on helping people discover videos – and YouTube’s Content ID program, which ensures that what gets discovered are “originally-created videos.” Facebook is focused on watching and sharing videos.
Sheryl Sandberg, Facebook’s COO, shared a couple of more nuggets of news. She stated that revenue from mobile ads was up 73% year on year to $3.4 billion and grew 73% year-over-year. That means that mobile accounts for around 78% of Facebook’s total revenue from advertising. So, Facebook is focused on mobile.
“The average American adult spends 25% of their media time on mobile, and Facebook and Instagram together continue to account for over 1 in 5 minutes on mobile in the US”.
Mobile, mobile, and mobile. Get it? Got it? Good. Sandberg stated that Facebook was a good fit for marketers as it has “the best performing mobile ad products, and video is making them even better”. She believes that Facebook video gives the marketer a chance to reach a mass audience, with great cross device targeting and measurement”. “Our third priority is making our ads more relevant and effective. Carousel ads show multiple images, and now videos, and drive 30% to 50% lower cost per conversion than single-image link ads”.
Video marketers are indeed faced with a two-party system. According to eMarketer, global mobile ad spending is expected to be $72.1 billion this year, and Google’s share of this market is projected to be 33.7%, while Facebook’s share is forecast to be 17.4%. And, according to comScore, the Top 6 – and 8 of the Top 9 – apps in the U.S. are owned by Facebook or Google.
Today, some casual observers may mistakenly believe that it doesn’t matter whether you choose YouTube or Facebook video. But, there’s a big difference between YouTube’s and Facebook’s world view of video marketing and video advertising.
Facebook is primarily focused on advertisers. Facebook is focused on views – and says a “view” is reached at the three-second mark whether or not the viewer has even turned on the sound. In contrast, YouTube has a more balanced concern for partners as well as advertisers. YouTube also has a more balanced concern for giving viewers choice over which ads they watch and connecting brands with a more engaged audience. In fact, with TrueView ads, you don’t pay for random impressions or maybe-they-saw-its. The viewer has to choose to watch your video or there’s no charge. YouTube not only urges advertisers to go beyond impressions and clicks, it also offers Google’s Brand Lift solution to help them measure brand awareness, ad recall, and brand interest.
Finally, if you’re looking for a recent example of the impact of video ads, check out this one: P&G’s Gillette generated buzz for its latest razor, Gillette BODY, by targeting a rapidly expanding audience of body-grooming men. With a digital-first strategy anchored by YouTube TrueView ads, Gillette reached millennial males with their “100 Years of Hair” video ad.
The results: over 84% of the 13.5 million total viewers finished most of the video, there was a 211% lift in searches for the Gillette brand, and the video ad generated over 500,000 clicks to buy.
The shift of ad dollars from TV to online video has been largely impeded by one factor: reach. Until now.
The coupling of YouTube’s intent-driven user behavior with Facebook’s “Super Bowl-sized” daily reach presents the largest threat to TV to date. The online video narrative has been fueled by the pitting of YouTube and Facebook against one another. Sure, drama makes for better ratings, but rather than succumb to this supposed conflict, we executed systematic A/B tests of identical creative and targeting on both platforms to set the story straight and provide deep insights into the respective strengths of video advertising on YouTube and Facebook.
The results prove that the two platforms serve different but very complementary roles. The combination of video advertising on both YouTube and Facebook is the key to dismantling TV’s media spend dominance.
YouTube’s TrueView ads on average deliver a much higher view rate and video completion rate (up to four times higher) than Facebook. The ability to target contextually for ad placements (e.g., by channel or video) has a measurable impact on video completion rates and audience retention—we’ve seen 1.5 times higher view rates when using placement targets (targeting specific channels) compared to standard affinity targets. YouTube also offers a lower cost per view in an apples-to-apples comparison of TrueView-style :30 plus (or whole ad) views. Sure, Facebook’s advertised :03 views are cheap, but most advertisers are rightfully skeptical about the impact of such a short exposure.
Facebook video ads, on the other hand, drive clicks and higher clickthrough rates than YouTube, and overall they lead to higher user engagement rates in simple interactions (likes, shares), given the social nature of the platform. While TrueView offers several interactive elements like info cards and companion banners, Facebook’s interactive elements are simpler and easier to understand, and take up significantly more screen real estate, making it easier for users to interact.
Google and Facebook offer near-perfect cross-device user data (and targeting capabilities), which is essential as mobile video viewing keeps growing. As marketers segment budget across platforms and devices, the cost efficiencies of each platform are important to understand. On Facebook, mobile ads tend to be cheaper than desktop (75 percent the cost in our tests). On YouTube, mobile ads are more expensive than desktop (130 percent the cost). Cost per view on mobile is comparable between Facebook and YouTube, and for clickthrough rate-driven campaigns, 30-second assets on mobile perform best across both platforms.
The reach of Facebook plus the long watch times driven by intent on YouTube equals better engagement and campaign performance when both platforms are used in combination. It’s an equation that will prove to even the most TV-loyal advertisers that they’re resisting budget allocation to a supremely effective medium.
Cross-platform online video campaigns—with the reach of TV and the engagement of digital—are the future of brand advertising.
Facebook is starting to become a must-buy for big brands, because it has the reach and the impact they want. Now, according to ad agency executives, they think Facebook is finally poised to capture more TV ad dollars.
“We see Facebook at a core pivot point,” says David Hewitt, VP and mobile lead at the digital agency SapientNitro. “It’s now a safe bet to put a lot of money into.”
In the last six to eight months, he says, brands have started to understand the reach Facebook has among smartphone users–some 844 million people each day. “It’s hard to get reach on mobile,” he says, but now “Facebook checks that box” in a way that few others online besides Google can.
Another reason is that Facebook mobile video ads can run in a lot of places besides just Facebook. Now that the company is operating a number of other distinct apps, such as Instagram, WhatsApp, and its own Messenger app, advertisers have a wider choice of places to reach a broader range of audiences in unique ways. It also can run Facebook ads on other sites that are part of its Audience Network.
Not least, advertisers like what Facebook is doing with video. In video ads that play automatically in people’s central news feeds, they have a format they know people watch (and that commands much higher prices for Facebook). “There’s an amazing amount of upside to Facebook mobile video ads,” says Hewitt, enough to overcome what he calls “muscle-memory media buying” by big brands.
What’s more, Facebook is pitching advertisers on the ability to buy ads using the same measures they use for TV ads, according to a recent report. Indeed, the ability to measure the impact of its ads on product sales is another big reason Facebook has attracted advertising’s biggest spenders. One example Sandberg cited: Acura used Facebook video to launch the TLX, then showed “retargeting” ads when people who saw the video went elsewhere online. Using a Facebook service called Conversion Lift, she said, Acura could prove the ads drove car sales.
Facebook isn’t alone in its pursuit of brand advertisers. “Google, for example, is rapidly building out audience targeting options, and has a ‘little’ video network of its own—YouTube—that is massively successful for advertisers and very effective on mobile,” says Craig Palli, chief strategy officer at the mobile marketing technology firm Fiksu.
So far, though, Facebook appears to be more than holding its own.