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Reels Ads: Facebook’s Desperate Attempt to Beat TikTok and Other Rivals

Earlier this week, Instagram announced that it has started testing ads in Reels, and it is not coming in as a surprise. Instagram puts ads about everywhere in the app, and now they are coming to Reels (1).

The social media giant, Facebook Inc, announced that it would start testing ads in its Reels, Facebook’s TikTok copy product, in India, Germany, Brazil, and Australia. It is then planning to expand that group in the forthcoming months. These advertisements can be up to 30 seconds long, similar to Reels, and would look similar to the ones users see in stories in that they are full-screen and verticals. However, unlike those Story ads, users can comment on, save, view, like, share, and skip them in Reels.

Instagram’s Sticker Ads

It has been four long years since Facebook introduced Stories, again a clone to SnapChat, to its platform (2). In most parts, a way to encourage users to post content was not highly produced or photogenic.

Last month, the company gave some users a chance to capitalize through that content. It announced a test in early March 2021 that would allow some creators to place ads that look like stickers in their stories and get a cut of the resulting revenue.

Facebook stated that the initial test is relatively small, but it hopes to expand it soon and then apply the technology for all short videos on Facebook (3).

According to The Verge report (4), Yoav Arnstein, the product management director, can’t share advertiser or creator partners since the test is still in the early concept phase. However, he stated that the broader idea is to offer advertisers a natural place to fit their content. For instance, if a user posts a video from Yosemite National Park, he could use a sticker for advertising a local business. And the contextual relevance would likely be vital to make these ads successful.

These story stickers are only one of the company’s several updates to its creators. Apart from these, it is also enabling its usual in-stream ads for shorter videos. Previously, content creators could only monetize with these ads with three-minute or longer videos. However, now, one-minute-long videos can also receive ads, which users could place 30 seconds into the content. Notably, videos that are longer than three minutes can place ads as soon as 45 seconds into the program.

Content creators can qualify for these in-stream ads if their published page has at least 600k total minutes viewed from any combo of video uploads such as on-demand, live, and previously live in the last 60 days. Additionally, they must also have five or more active video uploads or previous video videos.

Meantime, live video creators must have 60k live minutes viewed in the past 60 days to monetize via in-stream ads and meet the video-on-demand program needs.

Instagram’s Stars Feature

In the past two years, Facebook had announced a slew of monetization options for its content creators (5), which includes more paid groups, ad placement options, and Stars pack that viewers can purchase and send as tips during live streamers.

Stars, a tipping feature, are currently in use for gaming users. However, the platform is now also expanding to video creators and small businesses. Views can buy a pack of 100 Starts for about 1.40 USD, and streamers would get 1 cent per Star their fans send during the live streams.

Facebook is also testing paid supporter-only groups for fans who want exclusive access, monthly subscribers, which would enable them to connect with creators in a more private space.

It is clear that Facebook is trying to attract video creators away from competitors like Patreon and YouTube with its monetization features such as Fan Subscriptions, a 4.99 USD digital tip jar that offers them fans exclusive content. The company announces these features to add more ways for its creators to make money from the platform and customize their fans’ experience when they visit their Facebook pages.

Recently, Facebook also updated a bunch of backend tools to make managing profiles and pages more accessible. There is an updated Brand Collabs Manager that allows creators better manage audience engagement and enhance ad-targeting. It also offers the Creator Studio, a dashboard for admins to keep track of page metrics.

Facebook recently updated with a Monetization Overview section that displays earnings from Facebook, Instagram, and its other products. Here, content creators would also select where they can place these ads on their videos so that viewers won’t be subjected to interruptive ads in the middle of videos. They can also decide if these ads would be pre-roll or image-based if it is a shorter video.

It is essential to highlight that if you are a content creator who runs a Facebook page and has received an invitation to Fan Subscriptions, make sure to read the terms and conditions before joining thoroughly. It is Facebook, after all. The agreement stipulates that the company can take up to a 30% cut of subscriptions and asks for a lifetime license to use your work even if you stop using Fan Subscription (6).

However, the question is why Facebook is investing in the Stars? Arnstein says that the company wants to enable more people to experience the delight of supporting a creator. Arnstein thinks that it is relatively a new behavior that the company wants to make more ubiquitous across the app, and it believes that it is a great way to do that.

The Charge for Access to Live Streams

As more creators, businesses, and artists had turned to internet live-streaming tools during the pandemic last year, the social media giant had announced that it would be adding the option for users to charge for access to Facebook Live streams’ events.

The Announcement stated that to support content creators and small businesses, Facebook has planned to add the ability for its Pages to put a fee for access to events with Live videos on its platform. It can include anything from online performance to classes to professional conferences.

Facebook has already expanded its paid live event feature to over 24 countries (7). It has also expanded its fan subscriptions to over ten additional countries. It is also worth noting that the company won’t collect any revenue from either of these features through at least August 2021 (8).

All these announcements clearly ads up the idea that Facebook is looking to monetize as many of its content creators as possible via ads (9).

Even with stickers, the company’s idea was that they are only cute stickers. However, users can also tap them to buy a product. Creators would get a cut of the revenue. Here is an example,

Source: Instagram

Shopping in Reels

At the end of the year 2020, Instagram announced that it is covering up its platform with shopping content (10). It announced that it is rolling out its shopping to Reels. It had announced a test of the feature in October last year.

Content creators and businesses would be able to tag products when they create short videos on Reels, and viewers can tap through these tags to purchase or save them. Influencers or content creators who are paid for their posts can also leverage a branded content tag. And with the feature, Instagram enabled shopping in every format on the platform, Stories, Feed, IGTV, and Live.

Shopping is essential to Instagram, and its parent firm, Facebook, more broadly, as it seems to diversify its revenue. Ads are the primary way both platforms are generating revenue. However, shopping offers an opportunity to make a profit off sales fees. In the case of Instagram, users already look for product inspiration. Hence, offering them an option to purchase directly from the platform streamlines the process. It even redesigned its home screen entirely to emphasize shopping and Reels (11).

Notably, during the same time, TikTok had also partnered with Shopify to launch new shopping features (12). It also included a test that would allow Shopify users to tag stores in their videos with a ‘shop now’ button. Considering that Reels was only globally launched in August last year and users are already using it for shopping indicates how essential commerce is for Facebook and how desperate the company is to beat TikTok to the punch.

Is TikTok Still Ahead?

The ads in Reels are coming as no surprise, considering that Facebook has built its business around them. However, what was more unexpected was that the company brought Reels shopping worldwide before ads.

However, there is also a possibility that Instagram didn’t want to turn people off from a format that offers consistent ads wedged between the actual content.

It is also worth noting that as of January this year, Instagram head Adam Mosseri noted that he wasn’t pleased with the feature yet (13).

According to Mosseri, the platform is growing both in terms of how much users are sharing and how much users are consuming. However, he believes that the platform still has a long way to go, and we have to be honest that TikTok is way ahead.

He went to say that they are mainly focused on ‘table stakes’ at the moment and not honed in how to differentiate themselves. He specifically called out TikTok’s innovative and creative tools such as filters and effects that spur new video meme formats as something Instagram is not making itself yet. He is optimistic that it would also eventually do it, though.

He thinks Instagram has to get better at creating more robust and creative tools that are not necessarily a sort of meme or moment in a package. But it has to offer people who are more creative than the team, make content for a living, offer them the ability to make something that will pop.

Mosseri also points out that Instagram is seeing a conflict between its several different video formats. He adds that most users likely do not know the difference between videos posted to IGTV and Instagram. Notably, IGTV is the app’s format for longer videos that have existed since 2018 (14).

That is probably too subtle a contrast to resonate with many users. Hence, the team is now looking at how they can, not only with IGTV but also across all formats of the platform, simplify and consolidate ideas because last year, they placed a lot of new bets, he adds. He thinks that this year, the team will likely go back to their concentration on craft and simplicity.

It is a wildly different tone than when Instagram rolled out the format and called it the future of video (15). However, it speaks to the quick success of ByteDance’s TikTok, which was not fully known in mainstream culture in 2018. But, it has now become a driver of memes, conversations, and viral dances.

Mosseri also hinted that Reels, and IGTV, along with general videos posted to the Instagram grid, required some clarity and consolidation. And, it makes sense, especially when the platform is trying to do everything all at once.

Back to Reel Ads

Facebook announced that it has started testing ads on its TikTok copy Instagram reels in India and other countries. It is clear that the company is seeking to monetize its popularity in India, which is home to among the fastest-growing social media markets. At the same time, its biggest rival, TikTok is banned from the country for almost a year (16).

Read Also: TikTok India Lay Off, Permanent Ban, And Why it’s Good

The social media giant has also said that it plans to test others features in India as well, including allowing content creators to share Reels videos on their Facebook accounts.

Carolyn Everson, the vice president of the global business group at Facebook, stated in an interview that the rollout of ads indicates how robust the momentum is for Reel. However, he declined to share Reel’s usage metrics.

The giant also announced that it would allow advertisers to choose categories of video content they wish to place ads on, like videos about parenting, children, animals, pets, fitness, and food (17),

The effort is Facebook’s most prominent move yet to allow brands to advertise along with content subjects. Otherwise, it is typical for advertisers to use the platform to target specific users according to their interests.

Everson added that it is a massive deal for marketers.

These features are also the giant’s attempt to court its content creators who are making money directly from followers and fans via platforms like the membership site, Patreon, and an audio chat app Clubhouse.

Past month, Facebook also announced its plans to empower independent journalists and writers by allowing them to monetize their works on the platform. The company confirmed its plans to roll out a new program for content creators to self-publish their articles and capitalize their offerings through different tools, like subscriptions.

Read Also: Facebook’s Intention with its Newsletter Game

Other than ads, Facebook is also trying to roll out stickers ads for Facebook Stories in the forthcoming weeks. Brands can make stickers that creators can place in their Stories, allowing influencers to earn a cut from any sales made via the sticker ads.

While the feature would allow more people to become influencers, product placement may look more organic than a clear brand shoutout that a creator receives payments to promote.

In a sample mockup, the sticker does show that it is ‘sponsored,’ however, the font is faint and discreet. We expect people to miss that small disclaimer and may not know that the content creators or influencers posting them receive a share from any sales they made.