How Branded Content is Impacted by Facebook’s Update

Posted by Diarmaid on 20 Feb, 2018

Like many agencies creating branded content in Dublin, we’ve been analysing the impact of Facebook’s latest algorithm changes over the last few weeks. The impact on paid posts appears to be limited, but the real impact is going to be on organic posts from organisations and businesses – and especially on organic video posts. That’s something that will potentially affect the way that content marketing is done in Ireland and around the world. It’s also likely to have a knock-on effect on marketing campaigns all the way through from digital strategies right through to actual video production.

That’s a big deal for a video-first agency like us, but so far in 2018 the impact doesn’t appear to have been as big or as negative as might have been expected by some according to research by our friends at Newswhip. If anything, Facebook’s greater emphasis on video content that’s meaningful and that people want to watch is a positive for the types of brands we work with. It’s clear that to have the biggest chance of succeeding, video and especially branded content, needs to be more compelling and relevant than ever for the people who we want to watch them.

Now that the dust is starting to settle on this algorithm change, I thought it’d be useful to take a closer look at some of Facebook’s own words on this whole area. Their quarterly financial earnings calls make surprisingly good listening because they’re usually full of tips on how to make branded content and video that works well on Facebook. Their first call of 2018 was no exception. Mark Zuckerberg and Sheryl Sandberg gave a lot of detail on the changes Facebook were making to their newsfeed algorithms. But they left some big gaps in the information they initially shared too. Later on the call, some of the financial analysts listening in got the chance to ask them some pointed questions. They zoned in on the gaps that were left, forcing Mark Z and Sheryl to give more detailed answers than they’d perhaps initially intended to.

So let’s get straight into it and take a look at the top take away messages related to video strategy, video production and branded content in particular…

Time Well Spent

When it comes to spending time on Facebook, sometimes less is more. It’s all about “time well spent” according to Mark Zuckerberg:

Mark Zuckerberg: News and video will always be an important part of Facebook. But when people are spending so much time passively consuming public content that it starts taking away from the time people are connecting with each other, that’s not good. So let me be clear: helping people connect is more important than maximizing the time they spend on Facebook.

That’s all good stuff, but that’s having a knock-on effect… Mark Z again:

Mark Zuckerberg: We’re already starting to see this play out. On our last earnings call, I said that video done well can bring people together, but too often today, watching video is just a passive experience. To shift that balance, I said that we were going to focus on videos that encourage meaningful social interactions. And in Q4, we updated our video recommendations and made other quality changes to reflect these values. We estimate these updates decreased time spent on Facebook by roughly 5% in the fourth quarter. To put that another way: we made changes that reduced time spent on Facebook by an estimated 50 million hours every day to make sure that people’s time is well spent. That’s how serious we are about this. Now, we don’t normally share time metrics because they’re not the best way of understanding engagement. But this shows how committed we are to making sure the time you spend on Facebook is Valuable.

This was the section of the call that hit the news headlines. Whether they meant it to happen or not, the first casualty of this new newsfeed approach to video on Facebook is that people are spending a lot less time on the platform. 50 million hours less every day to be exact.

But is this algo really all that’s happening here? Or are people, maybe, just maybe, choosing to spend less time on Facebook themselves? One of the analysts listening in plucked up the courage at the end of the call to ask just that. Just to add to the confusion, his name is also Mark:

Mark May: Just wanted to ask a follow-up question regarding Mark’s comments that user engagement had declined by I think 50 million minutes and daily hours in the quarter. I guess the question is, how confident are you that that impact was due to News Feed changes that you made proactively versus some other factors outside your control? And if you are still fairly early in the process of making these quality improvements to the News Feed, do you expect for engagement declines to continue going Forward?

That question from Mark M put Mark Z on the spot, just as he thought the earnings conference call was wrapping up. But he came back with a long-ish, thoughtful reply. You can read the full answer in the transcript, but here is the main part of his response:

Mark Zuckerberg: So in Q4, we made a number of quality changes that were largely around video. We are going to continue to make quality changes now going forward around meaningful social interaction. And I do think that, that is likely going to continue this trend of decreasing passive consumption. But if we do our jobs well, it should increase the number of meaningful interactions that people have.

And we think that’s going to be positive. So we think it will help make the community stronger over the long term, and we think it will be good for the business in the long term. But this is what people are telling us is what they want on the product. It’s the unique value that you can expect from Facebook. You could go to a lot of places to consume content, but there aren’t a lot of services where you could strengthen your relationships.

So he kind of dodged the question a bit, to be honest. And he didn’t answer that point about Facebook not being fully in control of why people are spending less time on the platform. But what’s more interesting to me from a branded content point of view is the clarity he gives in that last sentence about Facebook’s USP: they don’t want to compete head on with YouTube or Netflix for “lean back” television-like viewers. They want to move the goalposts so that when people watch video on Facebook that they’re doing it in a sociable way, telling their friends about it and talking about it too. Kind of like the kinds of interactions between people that used to happen around televisions in sitting rooms (and still does on Gogglebox).

Whatchya Watch’in?

This brings us neatly to one of the most hotly anticipated moves by Facebook: their Watch tab. It’s kind of like YouTube and Netflix except it’s not. I’ll let Mark pick up the story:

Mark Z: Over the next three years, we know video will continue to grow, so our job is to build video experiences that help people connect with family, friends, and groups. That’s why I’m excited about Watch as a place to connect with people who have similar interests, and it’s why we launched products like Watch Party where friends can watch a show together.

Another important shift that we’re seeing across the industry is the growth of Stories. We expect Stories are on track to overtake posts in feeds as the most common way that people share across all social apps. That’s because Stories is a better format for sharing multiple quick video clips throughout your day. The growth of Stories will have an impact on how we build products and think about our business, including WhatsApp and Instagram, which are the #1 and #2 most-used Stories products in the world.

You’d almost feel sorry for Snapchat reading this. From this neat segue from the brief mention of the Watch tab to Stories, it’s clear that Instagram Stories are going to be a very effective way to go about video and branded content for brands in the short term. The much-heralded Watch tab will be more important for original shows and branded entertainment pretty soon. But not just yet. The key differentiator around both these formats is that they’re not passive – they’re more of a “lean in” experience instead of a “lean back” one.

Leaning In to Video Ads and Branded Content

Speaking of leaning in, Sheryl Sandberg gave more detail on the video advertising opportunities on Facebook. As usual, she focussed on the actual style and video production formats of the video ads by brands first. It’s clear by now that she really hates it when brands just put up their traditional 16:9 TV ads straight up on Facebook… mainly because they just don’t work well. To her, this makes the platform itself look ineffective, when it’s really just the format of the video ad that’s wrong, so she keeps pushing this point on every single call:

Sheryl Sandberg: As we expand and improve our ad products, advertisers are increasingly developing mobile-first ads rather than simply taking their TV creative and putting them online. Mobile-first video was 50% of our video ad revenue this quarter, compared to 41% last quarter. We’re seeing these short-form videos work well in Instagram Stories, where people can watch a full-screen vertical video and swipe up to quickly learn about a product or brand. 60% of these ads are viewed with sound on.

Sheryl always loves peppering her prepared remarks (and even her answers to questions) with real world case study examples:

Sheryl Sandberg: Recently, Open Table used Instagram Stories to advertise their reservation service to US adults who are frequent diners or are interested in dining. They combined food and restaurant footage with a “Book Now” button. The ads reached 1.5 million people and achieved 33% lower cost per reservation than their other campaigns. We are making it easier for any advertiser to try Stories ads as part of their other campaigns on our platform.

This ease of access (and hopefully relatively low media buying costs) will be good news for Irish marketers who want to experiment more with Instagram Stories.

But for all the enthusiasm around Stories, the analysts picked up on the lack of numbers around Watch. Here’s an example:

Heather Bellini: Can you share with us any metrics on Watch? And I know it’s really early, but anything that’s interesting from an engagement perspective here and kind of how you think this could evolve? Thank you.

And here was Sheryl’s answer on that point… kind of just saying “watch this space” (no pun intended):

Sheryl Sandberg: On Watch, it’s just early days. We have a dedicated place for people to watch and comment. We’re heavily focused on the social aspects of video viewing, but it’s too early to report any real findings.

Here’s another analyst’s take on it:

Justin Post: …just talk about how the Watch tab is evolving. Are you seeing a lot of usage there? And how do you think about content in the Watch tab versus the new feed? Thank you.

To this, Marz Z gave an uncharacteristically hesitant response:

Mark Zuckerberg: And for Watch, I — it’s early, there are some promising signs. But in terms of how we think about this overall compared to News Feed, I would say it’s really important to internalize that the News Feed video ecosystem and the Watch video ecosystem are almost completely separate things, right. So the Watch behavior that we’re building is one where people come intentionally to watch specific videos and to interact with the community around that. That’s in contrast to what we worry is too passive consumption of an experience in News Feed today, where people just happen too often see a video, and maybe they’ll watch it for a few minutes, but may not interact around it as much in News Feed. So we’re still very optimistic long term that Watch will be a use for video that helps to be bring people closer together, and that will correlate with all the things that our community is telling us they want and that correlates with the measures of wellbeing that we think that social products can generate by helping people build relationships in terms of all the long-term measures of well-being that we care about; like long term happiness and health, etc.

This answer too is short on metrics but big on vision. But they did have some more detailed metrics to share on video ads – especially midroll video ads – in response to this question:

John Blackledge: Just on the  ad units, on a midroll video ad, just wondering, I know it’s early, but just any color on the ad demand, and perhaps how you think about the impact of this ad units over the next couple of years.

Sheryl Sandberg:  On ad breaks for mid-roll video. Early days, pretty good results, more than 70 percent of ad breaks up to 15 seconds in length on Facebook and Audience Network are being viewed to completion. Most are being viewed with the sound on, but again, it’s very early for this.

It’s interesting that Sheryl mentions the sound being on when she talks about these ads, because originally Facebook was pioneering the idea of videos autoplaying with the sound off. YouTube used that to their favour, emphasising how they had “attentive reach” where people were actually watching the videos with their headphones plugged in. She also mentioned it earlier when she was talking about Instagram Stories. So these references to sound subtly emphasise that move away from passive viewing that Facebook are now pushing ahead with full steam.

The GDPR Elephant in the Room

Even though it’s one of the biggest things affecting marketing in Ireland and Europe this year, strangely the General Data Protection Regulation (GDPR)  didn’t get a mention in Facebook’s prepared remarks. One analyst pulled them up on that omission:

Douglas Anmuth: Can you talk about GDPR as well? I don’t think you mentioned it, but just curious. I mean, you put the blog post out the other day. But if you could talk about how you’re preparing here, that’s a little out over the next few months, and whether you think that presents and the risk to engagement or monetization.

Sheryl handled that question pretty well when she addressed it, but again not a huge amount of detail was forthcoming. Although she did acknowledge that some people in Europe might not opt-in to targeted advertising and stop using Facebook altogether:

Sheryl Sandberg: When you think about GDPR, the Facebook family of apps already applies the core principles in the GDPR , which are transparency and control. And we’re building on this to make sure that we’re ready to fully comply by May. We’re going to continue to give people a personalized experience and be clear how we’re using data and give choices. And we realize that this means that some users might opt out of our ads targeting tools. We also know that there may be a DAU [daily active user] impact for implications on European usage. But from the targeting, we’re not forecasting a big impact here. There’s some risk and we’re watching closely. Over the long run, we feel confident that we’re very well placed to navigate the transition.

It’s Good to Talk

It’s clear from what Facebook are saying that video is still going to be a big part of what content marketing looks like on Facebook. But it’s going to be a different type of content. In a world where linear television audiences are shrinking but people are watching television-like shows on lots of other platforms, Facebook is working really hard to stay relevant and keep people on their platform. Mark Zuckerberg, and the Facebook team, have come on a bit of a journey as anyone who’s seen the The Social Network movie will know. From its roots as an addictive, passive consumption platform that harvested user data, Facebook is now growing up a little and realising the impact its actions are having on people. They had to learn this the hard way, by trial and error, but now they have the data to prove that they can use the platform they’ve built to actually improve how people interact with each other. I’ll let Mark Z have the last word:

Mark Zuckerberg: And one of the big takeaways […] is that time when people are engaging and building relationships is good time. That correlates with all the aspects of long-term well-being that you would expect, like happiness and health and feeling more connected and feeling less alone, and all of the things that qualitatively matter in our life. And we think we can help drive that and improve people’s lives by doing that, so we’re absolutely going to do that.


About the Author

Diarmaid Mac Mathúna is Director – Agency at indiepics. He specialises in helping clients in Ireland and across the EU create video-first campaigns powered by meaningful video content that people want to watch. E-mail Diarmaid at and follow him on Twitter @diarmaidmacm or LinkedIn.

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