Internet behemoth Facebook is at something of a crossroads. Its next five years of growth will look markedly different to the five years which preceded it, and advertisers are starting to demand more accuracy and transparency for every dollar they spend on the platform.
73 per cent of Facebook’s revenues come from Europe and the United States, but these Western markets are also its slowest-growing, with growth rates of just 1 per cent each quarter. The only way to increase revenue in these markets is to dial up the volume of ads in the News Feed — but it is impossible to pump more ads into an already-saturated space without negatively affecting the user experience. While the platform has avoided interruptive advertising so far, focusing instead on ad-supported publisher inventory with Video and Instant Articles, it is now experimenting with mid-roll ads.
“Facebook is stuck between a rock and a hard place,” writes Recode’s Tony Haile. “As much as Facebook wants to create a better experience than the mobile web it disdains, the pressure to make these new inventory opportunities big enough and fast enough forces it down a road of increasing UX compromises by publishers who long since fought the war between short-term revenue and long-term user engagement, and too often chose the quarter over the future.”
Facebook currently hopes to acquire premium video content, but new third party audits of its metrics are calling into question the overall value of video advertising on the platform. According to Digiday, viewability rates on Facebook video campaigns fall well below the 50 per cent average, landing between 20 and 30 per cent (with some agency executives claiming the numbers are even lower). Facebook recently opened up its viewing figures to auditors after a series of measurement gaffes led media buyers to demand more transparency.
The MRC video viewability standard dictates that at least half of an ad’s pixels must be in view for at least two continuous seconds in order to be counted. Organisations such as Unilever and GroupM have additional conditions, expecting the full video to be in view, and the sound on.
While Facebook’s lack of consistency in its reporting has frustrated some agencies, there is still every reason to advertise there. Facebook now enjoys 2 billion daily users, and remains a less expensive alternative to TV. This extensive reach and relative low cost could, in some advertisers’ eyes, cancel out the fuzzier details surrounding viewability metrics.
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