This story was delivered to BI Intelligence "Digital Media Briefing" subscribers. To learn more and subscribe, please click here. Facebook tweaked how it surfaces videos to users in its News Feed: longer videos with higher completion rates will now be ranked more prominently in the News Feed. As a side effect, shorter videos may see a dip in distribution on the News Feed. Publishers stand to be gravely affected by this change in how Facebook ranks videos. Many publishers have specialized in short, bite-size video posts on Facebook. And although Facebook seems to be downplaying the potential impact of this News Feed update for publishers, the reality is that publishers will likely need to adapt to Facebook’s new preference for longer-form content. Favoring long-form is the latest in Facebook’s strategy to capture lucrative TV ad dollars: This algorithm update plays into Facebook’s plan to promote video on its platform. The company has made little secret of its ambition in this regard. In 2016, Nichola Mendelsohn, the company’s VP for EMEA, said that she expected Facebook to be all-video within five years, echoing similar comments by company CEO Mark Zuckerberg. The US market for TV ad spend totaled close to $70 billion in 2015, according to PwC, with the big four national networks – CBS, FOX, ABC, and NBC – accounting for 58% of revenue. However, these companies are under increasing pressure as digital video platforms – such as Facebook, YouTube, and Snapchat – continue to draw in audiences. These types of native ads — or ads that take on the look and feel of the content surrounding them — are taking over digital advertising. By 2021, native display ad revenue in the US, which includes native in-feed ads on publisher properties and social platforms, will make up 74% of total US display ad revenue, up from a 56% share in 2016, according to new BI Intelligence estimates based off historical data from the Interactive Advertising Bureau (IAB) and PwC, as well as IHS. The rapid uptick in native's share of display ad revenue can largely be attributed to the dominance of social platforms like Facebook and Twitter — which were early champions of native and rely almost entirely on native formats — as well as the introduction of new programmatic technologies that are making it easier for publishers and advertisers to scale native campaigns. BI Intelligence, Business Insider's premium research service, has compiled a detailed report on native advertising that breaks out native ads into three categories: social native, native-style display, and sponsored content (also referred to as premium native). It provides forecasts for how revenues from these formats will grow over the next five years and looks at what factors, in particular, are driving up spending on each of these ad units. As a note, because revenues from these three types of native content can overlap, it does not provide an overall native forecast. Finally, it lays out some of the challenges that face properties that rely on native ads, namely ad frequency and scalability issues. Here are some key takeaways from the report: In full, the report: To get your copy of this invaluable guide, choose one of these options: The choice is yours. But however you decide to acquire this report, you’ve given yourself a powerful advantage in your understanding of native advertising.
Facebook is shifting its focus to long-form videos by ranking longer videos with higher completion rates more significantly on its CBS. Publishers have largely focused on shorter “bite-sized” videos for the social media platform, but viewing of shorter videos may take a dip as a result of the new policy. Long-form videos are being featured more prominently to test mid-roll ads or ads that appear once viewers have watched at least 20 seconds of a clip and to test a video-only tab. Facebook is also seeking to attract TV advertisers and even to purchase exclusive shows.