Should TV Executives Feel Threatened by Facebook Video?

Posted by IAB Australia On December 04, 2014

One of the key trends I’ve seen in 2014 is a big push by the large social players into the video advertising space. It’s been a big year for social video launches in what seems to be a land-grab for traditional broadcast TV budgets. In particular, Facebook has made several key developments in the advertising video space. Should TV executives start feeling nervous about potential lost advertising dollars to Facebook?

Facebook announced auto-play premium video ads in news feeds earlier this year, prompting mixed reactions from both consumers and advertisers. Further, Facebook’s extension of video-buying models, including optimizing for reach, engagement or views, allows advertisers greater control.

Understandably some consumers have been concerned about Facebook’s increased intrusion into the sanctity of their private feeds. Do we really want to see 15s TVCs advertising corn chips first thing in the morning when we’re checking our friends’ updates?

Some advertisers enthusiastically jumped on the new video format, seeing an opportunity to extend their traditional and digital video reach. Other advertisers have been quick to criticize Facebook’s definition of a ‘video view’ as three seconds, believing this is not an adequate amount of time to ascertain whether a consumer has taken in a brand message from a video. I’m a supporter of the new format and three-second measurement definition. When scrolling through a news feed, video creative needs thumb-stopping power. Three seconds in this case, is a considerable amount of time (considering auto play) for a consumer to stop, watch, and then potentially continue watching or move on. Brands need to consider inserting brand/product/value messages even earlier on in the creative to ensure messaging effectiveness.

TV executives should start to feel nervous. Facebook has successfully repositioned themselves as a reach player (rather than an engagement and advocacy marketing channel) by changing their organic reach algorithm earlier this year. Facebook advertising revenue has continued to increase and I cannot see this growth slowing down anytime soon.

Yes, you cannot directly compare a small-screen auto-play Facebook video to a larger format AV experience broadcast from your living room. However, the relative cost-effectiveness (for now) of the Facebook video platform still does (for now) pose a very valid challenge to traditional broadcast TV media for three reasons:

1. The lean-forward mentality of consumers when flicking through news feeds means that consumers may be more receptive, open, and proactive in taking in information.

2. This is the first time in media history whereby advertisers have the opportunity to reach consumers at all times of the day, wherever they are. The average smartphone user checks his/her phone 150 times a day. Currently, TV’s weakness is its tendency to be consumed during evenings and weekends only.

3. Whilst addressable TV is increasing in sophistication and popularity, it is still rather broad and with limited scale. Digital video advertisers have the opportunity to target very precise audiences, at scale, and with options of creative message sequencing.

2015 will be the year that other social players further invest in their video products, further providing a challenge to traditional media budgets. It will be interesting to see how advertisers (particularly conservative ones) respond to the increased opportunities that are available to them. With continued increased sophistication from digital solutions expected, TV executives have good reason to be kept up at night over the next few years.

Jeff Tan is Director, Digital Communications Planning at Aegis Innov8.

IAB Australia

IAB Australia is the peak trade association for online advertising in Australia. As one of over 43 IAB offices globally and with a rapidly growing membership, the role of the IAB is to support sustainable and diverse investment in digital advertising across all platforms in Australia.

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