Recently Facebook shared its quarterly earnings of last year and it revealed its revenue growth as 49.1% in US and Canada. These revenues are the company’s home market where there is a strong purchasing power of the users with fast connectivity networks. Making and viewing of video ads is quite popular here as compared to the 35% of the growth rate worldwide. The 9.1% ARUP growth of this quarter is an indicator of the strong potential of the US and Canada’s market.
A year ago, Facebook announced its 8 billion daily 3-second plus views but as declined to share viewership stats this time. Viewership, on the other hand, is on the rise and this is clear from the Mark Zuckerberg statement in which he indicated Facebook video becoming popular with mobile users. The fast mobile networks of today have made it possible to watch videos more easily as compared to previous years. Previously it was hard to watch a video without waiting for it to buffer for 30 seconds before. Now the video loads in no time. Making a video and uploading is no issue with fast working networks.
The reason for this immense increase in video viewership is also the availability of better cameras, big screens with better video creation tools. More professional and amateur creators are developing a better understanding of the mobile format. Facebook’s various features such as the addition of live videos filters and effects, overlaid graphics, and augmented reality selfie masks developed with its acquisition of AR lens startup MSQRD. The addition of these features is becoming helpful in shortening the gap with the company’s competitor, SnapChat.
Although the popularity of SnapChat expected to take over Facebook’s audience but the daily visitor rate of the social media platform has increased overtime. Facebook is still strongly holding the two-thirds of its user’s base.
This quarter, the continuous user growth through video has contributed $7.01 billion in revenues and $2.35 billion in profits. Seemingly, the video feature has actually worked for Facebook.
Normalize the video feed:
In 2013, it was not easy to watch a video on Facebook. The videos available were either linked to YouTube or appeared clumsy that why people were not happy with the Facebook’s plan of auto-play video ads.
However, in 2014, with the rise of ALS Ice Bucket Challenge video meme and auto-play, videos were more prominent as a part of the news feed. According to Sheryl Sandberg, Facebook’s COO, the new P&G mobile video ads created to attract the attention of the audience in first few moments. This is because mobile ads are short and the message needs to be conveying.
Facebook is now planning to involve small businesses in its video format. According to Sandberg, the shift towards video can be their very first shot. Anyone with a smartphone can possibly make an ad and share it on Facebook without needing for a camera crew or production budget. Just in the previous month, around three million small businesses have posted their videos on Facebook including both organic posts and ads.
Facebook can possibly charge more for video ads as the average price increased 6% in Q3. As compared to other ad formats, video ads gained a higher CPM thus driving revenue growth. As YouTube and Facebook have become famous for video ads, Twitter and SnapChat are also aiming for this format. Facebook has dominance over this because an artificial intelligence research team that is working hard to target the right audience for video ads is making it.
According to a recent statement by Zuckerberg, visual understanding for now is the complete focus for understanding the photos and videos. A much in-depth research is going on in AI to for use for ranking News Feed, Search, ads, and other spectrums. With the video ads working, Facebook will get paid and AI will be assisting it to better target the audience.
With the mobile data networks, Facebook has developed a strong distribution network that video advertisers wish to join. User’s shift towards mobile has attracted app install ads from developers who want to rise out from the crowded web stores.
Via: Tech Crunch