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Facebook Video Is Booming. Now What About Video Ads?

Facebook is still working out how to show ads to its video-hungry user base.

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Investors had one thing in mind during Facebook’s Q4 earnings call Wednesday: How is video performing on Facebook and, more specifically, when will video ads become the real deal on the platform?

The question of video performance — both user-uploaded videos and video ads — was the most popular topic of discussion during the call. And with the exception of a new metric — users now register three billion video views on Facebook each day — the company didn’t have many specifics to share in terms of what to expect from video moving forward.

Here’s what we know

Facebook video is gaining in popularity. A lot.

Facebook did one billion video views per day in September. Now it’s up to three billion video views, and that only includes native video — that is, video uploaded directly to the service. That excludes video views from places like YouTube or Vimeo, which means that three billion number is likely much higher.

Why does this matter? Well Facebook believes that consumers watching video in the News Feed is a good indicator that it can serve those same users video ads down the line, particularly on mobile. COO Sheryl Sandberg said Wednesday that 65 percent of the site’s video views come from users on mobile devices.

“What really matters is that consumers are using video on Facebook because that gives us an opportunity … to have ads match that consumer experience,” she said. “If there wasn’t consumer video on Facebook, video ads in your News Feed would be very jarring.”

Here’s what we don’t know

Facebook is still keeping quiet on when, exactly, it plans to increase the video ad load for users, particularly the more expensive and TV-like “premium ads.” These ads make up a small percentage of the current video ads users see to date, Sandberg says, adding that the company is still trying to find the right balance of video ads to consumer video on the platform.

“We’ve already gained pretty explosive growth [in video] without that kind of premium content in the system in large numbers,” she said. “We haven’t figured out what that mix needs to be.”

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