Could ‘Uunskippable Ads’ Be The Answer To Facebook’s Revenue Woes?

As you have likely heard, Facebook’s shares plunged 19% last week. This is the equivalent of a staggering $119bn.

This has personally dented Mr. Zuckerberg’s net worth by $17bn, making him the sixth richest person on the planet, as opposed to the third. Although one suspects Christmas won’t exactly be cancelled in the Zuckerberg household, nonetheless, it’s significant.

Facebook's Revenue Struggles

Facebook’s share price has stood up to much scrutiny already this year and not buckled, even after major and public concerns from congress. So, what’s changed? Well, this time there is no major data-based controversy at the heart of things. It simply comes down to shifts in the way we are viewing content… Stories.

There are now 1.3 billion daily users across Facebook, Instagram and Snapchat watching stories. We love them – they are authentic, easy to create, easy to view and if they aren’t worth our time, they are also easy to skip.

Ads And Monitisation

Gone are the days where Facebook monetised status-style ads - ads that were easy and cheaper for advertisers to create, and thus more advertisers created them. Story ads require much more creativity, preferably a short sharp video that captures the users’ attention quick enough to avoid the dreaded left swipe.

Facebook have introduced ‘unskippable ads’ elsewhere on the platform, much to users’ annoyance. So, it is no surprise that the speculation is that these ‘unskippable ads’ are about to make an appearance in stories. By offering guaranteed reach, story ads would become hugely valuable for advertisers and Facebook could demand a premium on this medium.

Are Unskippable Ads The Right Thing?

It is the logical step, but after the huge uproar that Snapchat faced over their redesign earlier this year, Facebook would be wise to approach changes with caution.

I am not convinced about forced views. It tends to mean companies become lazy with their content, meaning marketers prioritise reach over engagement, which in our shared opinion is inexcusable.

YouTube have implemented a form of unskippable-ish ads that I personally find acceptable. They force the watch for up to 5-10 seconds – at which point, if you haven’t been convinced to watch on, you can skip the remainder of the ad. Perhaps this is a more fitting tactic for Facebook.

Video First Strategy

Either way, the near-term future of Facebook’s strategy and thus their climb out of this minor setback is going to be video first. Watch this space.