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Facebook (FB) Launches Mid Roll Video Ads Beta Testing

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Facebook Inc  said that it will now insert mid roll ads in its video content but as a  "beta test” for the time being.

In a blog post, Facebook said “We want to help our partners monetize their premium video content, both on Facebook and on their own websites and apps. The company further stated “As the name implies, Ad Breaks allows creators to take short breaks for ads during their live videos. When a broadcaster chooses to take an ad break, people watching the video will see an in-stream ad of up to 15 seconds in length. The broadcaster will earn a share of the resulting ad revenue.”

Facebook added that the feature will now be accessible to more Live creators. Only Pages and profiles with over 2k followers and 300 Plus views for recent live video can beta test mid roll ads. The first ad break can be taken only after the video has been live for a minimum of four minutes and for more ad breaks, there has to be at least a gap of five minutes between each ad break. Ad breaks will last up to 20 seconds. Ad breaks beta testing will be available only in the U.S for the time being.

Analysts observe that ever since Facebook has opted out of pre-roll ads, most publishers haven’t been able to earn money from their videos on the social networking platform. Plus, it has kept sports publishers from running “valuable content” on the platform.  With mid roll ads, Facebook is giving publishers an opportunity to make more money. Reports add that Facebook will share revenues with publishers in a 45:55 ratio, similar to that of Alphabet’s (GOOGL - Free Report) YouTube.

Facebook is aggressively promoting “Live” in order to boost its top line further. Facebook is trying to bring more video content to attract more ad dollars. Ad revenues contribute over 95% to Facebook’s total revenue. It intends to capture the opportunity presented by ever increasing video viewing on social media platforms. At its last earnings call, Facebook said that video has emerged as a “megatrend” on the same lines as mobile.

Zacks Rank and Share Price Movement

At present, Facebook has a Zacks Rank #3 (Hold). Moreover, we note that Facebook has outperformed the Zacks categorized Internet Services industry in the last one year. The company’s shares increased 26.52% compared with the industry’s gain of 16.09%.

Stocks to Consider

Better-ranked stocks in the wider technology space are Texas instruments Inc. (TXN - Free Report) and Netflix Inc. (NFLX - Free Report) . Texas Instruments sports a Zacks Rank #1 (Strong Buy) while Netflix carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

In the trailing four quarters, Texas Instruments and Netflix recorded a positive average earnings surprise of 7.09% and 141.35%, respectively.

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