Facebook to launch mid-roll video ads to generate more revenue

Economy - Himanshu Gill - Jan 11,2017

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facebook to launch mid roll video ads to generate more revenue

Facebook will start testing “mid-roll” advertising in videos on its platform; a move aimed to boost revenue for streaming companies and Facebook itself.

The company has already been testing ads that run in the middle of videos for its live-streaming feature, Facebook Live; however, the new decision will extend that program into regular videos.

Video publishers will be allowed to insert ads in the clips after 20 seconds of the video. Facebook plans to keep 45 percent of the revenue generated by this new ad service, giving video publishers a little more than half of the revenue shares. This is the exact same figure that splits revenue offered by YouTube to its uploaders.

Currently, Facebook makes money by showing advertisements and sponsored content on its feed for which it gets paid by companies and users. Facebook has been pushing videos uploaded on the website on its users for some time now, claiming that over a 100 million hours of videos are watched by its users each day.

According to the latest reports, ads length would be limited to 15 seconds in duration, unlike YouTube which gives no specific limit for ads duration.

Until now, Facebook has allowed publishers to upload videos that are sponsored by advertisers but has restricted itself to a just a few well-known publishers like Buzzfeed.

The long-term business model seems largely unclear, particularly because the company has consistently avoided the YouTube style pre-roll video ads. A previous feature from Facebook called Suggested Videos—that offered a scrollable collection of videos with ads interspersed— fell flat with media companies.

Publishers have received no ad revenue from their video content on Facebook. This decision shows Facebook’s intent of giving more importance to video content, which is termed as the future of information consumption.

Facebook considers even three seconds of the video running as a ‘video view’, but this will surely change with advertisements rolling out.