Facebook’s New Year Resolution: More Video Ads in News Feed

Fidji Simo, Facebook's director of product for video
Photo courtesy of Facebook

The amount of video on Facebook Inc.’s news feed more than tripled last year, as many users and advertisers discovered the option for the first time. How much bigger video will get on the social network depends largely on Fidji Simo.

Simo is Facebook’s director of product in charge of video. After the social network debuted video ads last March, her team added tools for advertisers to measure whether the promotions fit goals they’d set. This year, Simo said she plans to tweak the website’s design so marketers can more easily buy video ads and monitor their campaigns. She’s also working to improve video targeting so the right Facebook users see the right ads.

Her efforts are central to Facebook tapping the U.S. online-video advertising market, which EMarketer Inc. estimates will reach $7.8 billion this year, up 30 percent from $6 billion in 2014. While that’s a fraction of the $70.1 billion U.S. television-advertising market, the growth rates in digital video promotions exceed that of other parts of the advertising industry, providing a lucrative revenue source for Menlo Park, California-based Facebook.

“We’re just really at the beginning of understanding what video on Facebook is about,” Simo said. “We want to make sure that we’re really communicating on how people are engaging with video so marketers can really understand.”

Embracing Video

Facebook today is releasing a progress report about video on the social network, including how users and brands have boosted the amount of video in the news feed by 3.6 times in the past year. In addition, the number of video posts per person has jumped 75 percent, with more than half of daily U.S. visitors watching at least one video a day, the company said. Facebook Chief Executive Officer Mark Zuckerberg said in a November public question-and-answer session that in five years, most of Facebook will be video.

Still, Simo’s job remains complicated -- especially with marketers. Brands typically measure a promotion’s success against television and other parts of the Web. Facebook’s video ads don’t work the same way as those offerings, as they can be targeted more specifically to certain demographics. Facebook ads also run alone, instead of appearing ahead of other content like on Google Inc.’s YouTube and Hulu Inc.’s streaming service. What’s more, the social network’s promotions play automatically without sound in the news feed until people click on them.

Education Kick

That means Simo has had to create new metrics for marketers to evaluate their video-ad campaigns in Facebook, including how many people clicked on a link at the end of a video. She has also had to educate advertisers on video, attending the company’s advertising council meetings, where executives at Facebook meet with consumer giants like Coca-Cola Co. and Unilever Plc. Marketers have asked to see more clearly how their advertising leads to sales, Simo said.

Facebook doesn’t break out revenue from video ads, for which it has been charging $1 million or more a day for 15-second spots, people familiar with the situation have said. Advertisers including Kate Spade & Co. and Gap Inc. have used Facebook’s video ads, the company said.

Facebook “is coming on strong and has the potential to put pressure on YouTube,” according to an EMarketer report today that said social media will change the rules for video advertising.

More Steps

Facebook has been taking more steps to improve video ads. In September, the company unveiled an ad server tool called Atlas to let marketers get data on how often individuals saw ads and on what device -- something that’s essential for video now that 65 percent of Facebook’s video is viewed via mobile devices. In July, Facebook also agreed to acquire startup LiveRail, which will help it serve video advertisements outside of the social network.

“LiveRail will make it so that publishers can be more efficient, and Atlas can help them understand how it helped their business,” said Brian Boland, a vice president focused on ads at Facebook.

Simo, who joined Facebook in 2011 from EBay Inc. and who has helped the social network simplify its ad-format options, got her team to build more ways for advertisers to measure video last year, such as letting them see how many people are watching at a certain time. The company also added prompts at the end of its ads that sent people to websites or asked for an action.

This year, one type of video-ad campaign Simo said she’ll continue to pitch heavily to advertisers is one that involves following up on videos with other kinds of ads, called retargeting. That will help Facebook get closer to proving that it can drive sales, she said, with videos helping to brand a product and the follow-up promotion moving someone to actually purchase the item.

“This is really the year where we made a lot of investment and advertisers are now embracing the fact that we are big in video,” Simo said.

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