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Facebook's New Video Ads Aren't Ready for Small Businesses -- Yet

The initial market for the video ads will be large brands.

Kurt Wagner for Re/code

Facebook spent the summer teaching small businesses how to advertise on its platform, but the company’s highly anticipated video ads weren’t part of the lesson plan.

The social network, which has more than 1.5 million small- and midsize-business advertisers, offered “boot camp”-style ad conferences at five U.S. cities over the past two months. Company employees taught SMBs and entrepreneurs the basics, like how to create appropriate content and how to target the right audience with their promoted post.

What wasn’t covered, however, was video, an ad format Facebook will expand over the coming months. Facebook is testing autoplay video ads in News Feed for the first time with the hope that big brands spending generously on TV ads will bring some of those marketing dollars to Facebook instead.

The vast majority of Facebook’s advertisers are SMBs, but the boot camp omission wasn’t accidental. Video ads — especially the autoplay video ads, which first debuted this spring — aren’t yet ready for the general Facebook advertiser, says Dan Levy, Facebook’s director of small businesses.

Instead, Facebook is still preparing users for the ads, showing more autoplay videos in the News Feed and collecting data on which Facebook users consistently watch video content.

“We have to get the consumer experience right, and autoplay is obviously a big deal,” Levy told Re/code at Facebook’s Menlo Park, Calif., headquarters on Tuesday. “We want to be sure people are seeing and loving autoplay content from their friends so that when they see the commercial content it feels natural.”

Facebook is working with some advertisers on autoplay ads, but they aren’t SMBs. Instead, they’re major brands, the same type of advertisers spending millions each year on TV advertising.

That means that Facebook’s new ad platform really won’t appeal to the majority of its advertisers — at least not right away. Levy says that SMBs will have the option to buy self-serve autoplay advertisements down the road, but there’s no timetable for that.

One barrier for small businesses will likely be cost. Facebook was initially looking for $1 million to $2.5 million per ad before cutting that cost to $600,000 in February, according to Mashable. That’s far outside the realm many SMBs can afford.

Nadia Aly, CEO of a small scuba business called Scuba Diver Life and a Facebook boot camp attendee, says she spends between $3,000 and $7,000 per month on Facebook advertising. She says she can’t wait to get involved in video ads, and estimates that she would be willing to pay around $0.25 per view.

Levy wouldn’t say if autoplay ads will fit into a budget as small as Aly’s, but did add that most of the cost depends on the target audience. For example, surfacing an ad for mothers in Silicon Valley will cost a lot more than targeting 70-year-old men in France, he said.

Once the first wave (or two) of autoplay ads rolls out, Levy and his team will work on selling them to SMBs. Until then, Facebook will focus on attracting big-name brand dollars instead.

“These [small] business owners don’t want to hear about what’s coming,” said Levy. “They want to know ‘what can I do right now?'”

Update: Adds a line of context about autoplay ads in paragraph three.

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