Frontline Marketing

How Mid-roll Ads Are Changing Social Media Video Monetization

By | January 11, 2017 |

“And now, a word from our sponsor . . .” Consumers are used to commercial breaks on TV, but video interruption on other platforms may soon become the norm.

Facebook will begin testing mid-roll ads on Facebook Live, according to a source familiar with the company. As reported by Recode, Facebook will sell the ads and share 55 percent of revenue with video publishers, matching the current revenue split offered by YouTube. Until now, the social media giant—boasting 100 million hours of video views per day—allowed only sponsored video content to be uploaded, but no pre-roll advertising. This has made it difficult for brands to see an immediate return on investment for their video production efforts. If the tests are successful, mid-roll ads on Facebook will encourage creators to upload videos of at least a 90 second duration, and the ads only appear once a viewer has watched a clip for at least 20 seconds. Perhaps in light of recent video view controversy, Facebook is trying to prove that its video views are not only being accurately counted, but are potentially a steady revenue stream for brands.

The idea of video ad breaks was hinted at last fall when Facebook’s vice president of partnerships, Dan Rose, spoke of the potential.

“Next year, we’re going to be looking at ways to apply the ad break model to regular videos on Facebook, videos that are not live,” he told Poynter. “Videos that are producing and publishing. We’re not there yet. Over the next few months, we’re going to be expanding the ad break within live videos. But early next year, we hope to be able to talk more about how that same idea could apply to regular videos as well.”

Snapchat began utilizing mid-roll ads last October by displaying them when someone watches more than one Stories update in a row. Both Snapchat and Facebook are hoping to challenge YouTube for video ad supremacy, although they’ve got a long way to go before then. YouTube remains at the forefront of mid-roll usage, allowing users to insert ads mid-way through long-form videos lasting 10 minutes or more.

Why do mid-roll ads work? According to the Ooyala Video Index’s “The Rise Of The Mid-Roll,” mid-roll ads had a 90 percent average completion rate, compared to 78 percent for pre-roll and 65 percent for post-roll. The success of mid-roll completion rates may be attributed to the viewer already being invested in the video content they are watching, and therefore more willing to watch the entire ad. Another explanation offered by Ooyala is that mid-roll ads look and feel like watching TV where people are already accustomed to breaks in the video content they’re watching.

“Mid-roll ads are a powerful opportunity for brands to insert their message in a (seemingly) seamless way, without annoying the viewer from the get-go. People will likely be more tolerant of ads because when they’re already engaged in the content. Whereas, with pre-roll, the engagement has yet to begin, which gives viewers an immediate ‘out’,” said Lindsey Buchanan, director of content strategy for ION.

Mid-roll accounts for more than 33 percent of digital video ads in apps, online and through video-streaming boxes like Apple TV—up from 20 percent at the start of 2015, according to recent figures from Ooyala based on the ads sold through its platform. Pre-roll ads, meanwhile, have been on the decline, Ooyala reported.