Facebook is giving brands assurances that their commercials will only run in a thoroughly vetted video environment as part of a new program that focuses on premium content. The new ad offering is also coming down in price since Facebook first started testing the program earlier this year.
Facebook is asking brands for $100,000, down from at least $250,000, to participate in the tightly controlled, guaranteed quality video marketplace, according to advertisers familiar with the program. The commercials appear in Facebook Watch, the year-old video service that features shows like "Ball in the Family," a reality show about the basketball-playing Ball brothers. There are also shows from publishers and TV studios, and Facebook splits ad revenue with them.
Now, advertisers can buy ad space directly from Facebook, not through the programmatic, automated self-service platform, and that way it can place ads in videos it has reviewed. Facebook calls the new offering "in-stream reserve buying," and it's a rival ad product to Google Preferred, a similar program that commits to only run ads in the top videos on Google and YouTube. Facebook also now allows brands to buy ads in individual Watch shows, and pick categories of videos to sponsor like sports, .
"They're controlling this environment very carefully at the outset," says an ad agency executive, who spoke on condition of anonymity.
Facebook is promising humans will review every video before approving them for showing ads, the agency exec says. There are about 250 publishers in Facebook's curated video advertising pool, the agency exec says, including NBC Universal, Fox Sports, Hearst, Condé Nast, Insider, Group Nine Media and Funny or Die.
Aside from the minimum price to participate coming down, the cost of the video ads are also starting to drop, according to advertisers. The premium ads used to cost up to $30 for a thousand views (CPMs), according to participating advertisers. One advertiser says prices in the reserve program have decreased about 20 percent in recent weeks, however.
Outside of the reserve program, video ad prices in Watch are closer to $10 for every thousand impressions, advertisers say.
Facebook officially announced "in-reserve buying" last week, but the social network has not disclosed all of the details like pricing and the participating publishers. Facebook declined to comment for this story, and advertisers and media partners spoke on condition of anonymity because they were not authorized to talk publicly.
Watch is competing with YouTube, Amazon video, Hulu, Twitter and other streaming digital properties looking to win major brands that are shifting ad dollars form television. However, Facebook has faced similar challenges to YouTube and Twitter when it comes to ensuring that video ads run only in desirable contexts and not appear with low-quality or even offensive programs. Facebook Watch hosts television-level shows like a new scripted one from Elizabeth Olsen called "Sorry for Your Loss," but it also allows anyone to set up a Watch channel, similar to YouTube stars.
When advertisers buy ads through automated programmatic pipes, the platforms give them little ability to choose where the commercials run. Advertisers are torn, however. They want the ease and convenience of placing ads programmatically but they also want the quality control affroded by ordering ads directly from the platforms.
That's why Facebook has developed the new way to buy ads on Watch so brands can ensure they appear in quality shows and not in shadowy amateur programming. It also means advertisers can choose to run alongside only sports programming, or other desirable categories of content. Facebook has been investing heavily in sports content with shows from Major League Baseball, National Football League, and sports stars like Tom Brady.
Facebook also streams live games, but many brands avoid running commercials in those because they fear the live video environment on Facebook, according to a number of advertising executives. For instance, on Thursdays, Facebook shows MLB games, and they often lack mid-inning advertisers.
The new way of buying ads won't help with the live games, but brands can get a piece of professional sports through programming like the highlights shows that the leagues produce. Advertiser can also get a piece of other premium content from top TV networks like NBC Universal and Fox Sports, according to advertising executives who are familiar with the program.
There is a select group of publishing partners that sell the ad inventory in their own Watch shows, and some of those partners are also now available in the reserve buying program, according to advertisers.
That could become a tension point between Facebook and publishers if they wind up competing over the same ad dollars. Facebook splits ad revenue with media partners. One Facebook media partner now sells most of its own ads, but expects the new reserve buying will backfill leftover inventory, an executive says. So far, there is no tension.
"For us it's gone quite well," the media executive says. "We sell one way and Facebook sells another. It just comes down to what the advertiser wants."