Facebook Tests Putting Ads Before Videos Users Want to Watch

(Bloomberg) -- Facebook Inc. is going to start putting advertising before videos in its new shows product, called Watch, part of an effort to come up with a lasting business model for the content.

Facebook has expanded the content available on Watch in part by paying creators directly for their shows. If it can build a big enough advertising business, it won’t have to do that anymore. But that future is far off and the company has tweaked its formula already several times.

Most of the data Facebook collects on what kind of video people consume is based on activity in the news feed. In that space, watching video is a passive experience, where people may be distracted by short videos about extreme sports or cake decorating as they scroll through their friends’ updates. For Watch to work, video consumption has to become more active, like it is on YouTube, where people come back to it as an entertainment destination in itself.

The social network said in a blogpost Thursday that it’s also changing the news feed algorithm to encourage publishers to create content that users would actively seek out, in a first step toward solving the problem. Still, the so-called pre-roll ads aren’t being tested in the news feed. The company hasn’t said how many people go to Watch for the shows, versus catching them in their news feeds.

Facebook is also increasing the length of a video that is allowed to have advertising in the middle, to 3 minutes instead of 90 seconds.

©2017 Bloomberg L.P.