Facebook Video Monetization – How Facebook Videos Can Help You Make Money

As you may have heard, Facebook is getting serious about Video Monetization. This week’s announcement of a new video monetization (read: ads) strategy dispelled any remaining doubts on that matter.

Video Monetization has been here for quite a long time with YouTube being the sole major player. Lately video have also taken over Facebook, with daily views on the platform growing four-fold to a whopping four billion in just a year. But until now, Facebook video creators haven’t had any way to make money on the platform…That changes today. Facebook has officially introduced its plan to monetize videos and share the revenue with creators. Facebook’s revenue split with creators is the same as YouTube’s: 55% of the money earned from ads goes to the creator and 45% to Facebook. The program begins with “a few dozen” partners, including Tastemade, NBA, Hearst, Funny or Die, and Fox Sports.

Facebook will give video creators 55% of ad revenue.

Facebook’s revenue split is slightly more complicated than YouTube’s “pre-roll” ads that play before videos. That’s because Facebook videos play automatically with the sound off. Auto-play pre-roll ads would annoy users, so the company created a whole new environment to show people videos, and in turn, video ads.

How will the Monetization Work ?

When a Facebook user goes to watch a video on mobile, they are taken to a screen with a black background that automatically suggests more videos to watch afterwards. (It’s called, in Facebook’s straightforward naming convention, “Suggested Videos.”) . After a certain number of videos, the user will see a inline video ad. The ads is not attached to any one piece of content, but rather floats between them like a TV commercial. One key difference is that, unlike Facebook’s auto play videos, these ads will have the sound on, since users are already watching video with sound.

Facebook will split revenue from ads watched between all videos watched in a single session, determining the payouts by how long the viewer spends with each video. So, if you watched a one-minute video from Funny or Die and a four-minute video from Fox Sports with an ad in between, Funny or Die would get a fifth of 55% of the ad revenue and Fox Sports would get four-fifths of the 55% of revenue.

But many industry watchers expect video, and specifically, mobile video, to be a major source of revenue growth engine for Facebook in the next year. Despite a recent deal to host two new HBO shows, Facebook maintains it is focused on short form videos and not long-form TV shows and movies. A prior deal in 2011 with Warner Brothers to host movies including the Dark Knight fizzled.) “Facebook is used as a product [in] short, bite-sized sessions — people dipping in and out, multiple times a day, and for brief periods of time,” Rose says. Suggested Videos and News Feed are optimized for short-form video, he added.

Despite its early success, Facebook faces challenges on its road to video dominance. For one, YouTube, which has been the only video platform with scale for a decade until Facebook came around, will not give up easily. The platform has been fighting to keep its prized creators on YouTube, offering bonuses for anyone signing an exclusive contract. And YouTube is not the only player competing for premium video content. The overflowing bucket of TV ad dollars is too great a prize for any web platform to pass up. As I wrote earlier this month.

Further, Facebook must rush to roll out the sophisticated analytics and copyright tools that publishers are used to. Too often, a random person can upload someone else’s video. Take a recent clip from the Daily Show about the Charleston shootings. A performing artist called Rock-Solid uploaded it to his page and got 23 million views. The Daily Show’s own version, posted hours later, has less than 2 million views.

Executives from the latter two companies provided quotes expressing how “excited” they were about video on Facebook. Only Facebook will sell video ads during the test, unlike with Facebook’s Instant Article program for text publishers, which allows content owners the option to sell ads.

Since the first introduction of videos on users’ News Feeds, Facebook has been in the constant process of improving the way users and businesses on the network interact with the content: the network launched the autoplay feature, allowed videos to be shared and embedded to third-party sites, and provided in-depth analytics on sponsored video content. And the efforts have paid off: video content on the network has grown 400 percent since the launch of Facebook videos, now averaging four billion views each day.

Facebook continues to fine-tune its video functionality, making small changes that often mean big consequences for businesses on the network. To save you some time, we have highlighted four major changes to Facebook videos—and how they can help your business make money.

Facebook video monetization

On July 1st 2015, Facebook announced a new monetization policy to encourage businesses to create and host video content on the network. The new system relies heavily on Facebook’s Suggested Video feature, which shows content similar to the video the user just watched. After watching a couple of videos, the user will see an ad, similar to the pre-roll ads one would see in a YouTube playlist. Unlike other Facebook videos, these ads will have sound on.

Revenue from sponsored Facebook videos will be based on several factors: the number of views the ad has received, the number of ads a user watched in a single viewing, and the amount of time the user spends on every video. Out of the total revenue, 55 percent of the money will go to the creator of the video content and 45 percent will go to Facebook. However, if the user watched several sponsored videos in one setting, those 55 percent will be further split between video creators.

The monetization initiative targets mobile Facebook users specifically, as they count for ¾ of the total video views on the network. This is also an area where Facebook already wins over YouTube, where half of the total views come from mobile users.

Facebook’s shared video ad revenue program is currently open for select content creators, such as Funny Or Die and Fox Sports, with promises to open up the program to other brands in the future. If your business has already been experimenting with video content on Facebook, you have a leg up; but if social video is a new area for you, now is a good time to start testing different kinds of content to see what resonates with your audience. Figure out the main goal for your videos: is it brand awareness or lead generation? Another important point to consider is length: now that the revenue split will be determined on how long the user spends watching your video, you’ll have to find that optimal time for keeping the viewer engaged but also doing so for a longer period of time.

Algorithm changes reward engaging video content

Facebook’s latest News Feed algorithm change will give more organic visibility to engaging video content. This means that if a user has interacted with your video—expanded to full-screen, turned up the volume, or enabled the high-definition format—it signals Facebook to show them other videos from your business, or similar video content from other sources.

This change was motivated by feedback from users who said they often enjoy watching Facebook videos, but don’t feel the need to share, like or comment on them. The new algorithm change will benefit the users as well as video creators, who will receive an organic traffic boost as a reward for posting high-quality content.

Facebook Insights for video data

Facebook has been rolling out other features to help advertisers benchmark the performance of sponsored video content. Facebook recently added a new Video tab to its Insights dashboard, which offers a look into views and 30-second views at a Page level, top videos within a certain date range, and metrics for videos shared from other Pages. This data takes the guesswork out of the process of finding the elements of the best video for your audience. Video Insights gives you information on the performance of individual videos, and how these compare to other videos you have shared.

Page administrators will also be able to compare the number of views generated organically versus paid advertising, and see how many videos were viewed through auto-play versus click-to-play. Brands will also be able to measure performance of sponsored videos over time, and see their top performers. The Video Insights tab is currently available to a limited number of Facebook Page managers, but it’s expected to launch globally in the coming weeks. The timing couldn’t be better—this way, advertisers can have hard evidence to back up their choice of sponsored video content to use in the new monetization initiative.

How will a  Facebook Video Creator get paid?

Finally, Facebook is making video ads more affordable for brands. The network has recently confirmed that it’s changing the way sponsored video views are priced. Now, instead of charging the advertiser as soon as the video appears in the user’s News Feed—similar to the cost-per-impression pricing system—Facebook advertisers will only pay for users who have made it past the ten-second mark in the video.

This may also change the way a view is qualified on Facebook: over the first few months of Facebook video ads, anything past three seconds counts as a view (versus 30-second rule for YouTube). The older system risked collecting exaggerated view counts without users actually watching the ads. Now, video content creators will pay for viewers who have shown that initial ten-second interest—and, once the shared revenue program kicks in, brands can get greater ROI for those ads.