Facebook wants to make it easier for publishers to make money

For the last couple of years, Facebook has presented news organizations with difficult choices about how to publish their journalism.

On one hand, editors and producers can put stories exclusively on their own properties and use Facebook to drive readership back to their websites, where their conventional advertisements live.

Alternatively, they can publish some or all of their content directly onto Facebook, hoping that the network’s massive reach and enormous advertising clout justifies giving up some control over the way their stories are distributed.

Now, Facebook is offering publishers more incentives to take the second option, including an experimental ad unit for live video, more variety for ads on Facebook Instant Articles and more robust analytics for native advertisements.

It’s part of a push on Facebook’s part to give news organizations and other publishing partners more opportunities to make money directly on the social network, said Dan Rose, the social network’s vice president of partnerships.

“What we’ve heard from them over the last few years…is that they would really like a way to make money on Facebook directly,” Rose said. “Not just from the actions that people take off of Facebook. That feedback has inspired us to think hard about how we can enable that type of monetization on Facebook directly.”‘

In a question-and-answer session with Poynter, Rose outlined several steps Facebook is taking to help turn the social network into a larger revenue source for publishers. Among them:

Larger and different types of ads are coming to Facebook Instant Articles.

Facebook is experimenting with a new mid-roll ad format, “ad break,” which will debut in live videos and eventually expand to other types of native video.

After giving its initial blessing, Facebook is unveiling enhanced insights for publishers who create and share branded content.

A condensed version of that question-and-answer session, which also touches on Facebook’s growing influence over the distribution of news, is below. The questions and responses have been edited for length and clarity.

What’s Facebook’s current philosophy regarding monetization — the way publishers make money on the social network?

It starts with the value exchange between the three parties: Facebook, our partners and the people who are consuming this content. Historically, the value proposition for partners who are publishing content to Facebook has been around distribution. We obviously have a lot of people who are on Facebook, and when somebody like a news organization publishes a link to an article, their goal is to get somebody clicking on that link and then consuming the article on the website where they can show them ads and make money from it.

If a television host publishes highlights from a show, their goal is to get people to actually watch that show on TV, where they make money from the ads that appear there. A sports league posting highlights from a game is hoping that people will buy a ticket or watch the game on TV, et cetera. And that value exchange has led to a lot of growth in the number of media companies and public figures who are publishing to Facebook for that purpose.

We have a large team in my organization supporting those partners. What we’ve heard from them over the last few years as we’ve been engaging more and more is that they would really like a way to make money on Facebook directly — not just from the actions that people take off of Facebook. That feedback has inspired us to think hard about how we can enable that type of monetization on Facebook directly. So, today, we’re going to talk about three different areas that we’ve been focused on.

One is Instant Articles, which you mentioned. Two is branded content. And three is a video. And I’m happy to start with Instant Articles, if you want to start there.

As I understand it, Facebook is making some changes to Instant Articles. What can you tell me about that?

We started Instant Articles with the idea that we wanted to speed up the experience of people clicking on links to articles on Facebook. We saw that on mobile phones that was the slowest part of our news feed experience. Where, often times, it would take eight or 10 seconds for an article to load. And we had a hypothesis, or a hunch that if we could make that feel more Instant, more native, more the way that people expect content on mobile to behave, more people would click on those articles and engage with them. And that would ultimately be good for the people who were on Facebook as well as for the publishers of that content.

What we’ve seen now, as its been rolling out steadily over the last 18 months is that…in the U.S. and Canada, for our publishers who are publishing on Instant Articles, they’re seeing a 25 percent lift in their articles being read on Facebook. So it’s great to see that gap (we predicted) is actually being validated with real data now.

The thing we’ve heard from our partners who’ve been engaging with Instant Articles consistently is that it’s really important for them, obviously, to be able to monetize Instant Articles. And we’ve been steadily expanding the options and functionality for monetization within the product. Last November, we relaxed some of the constraints around spacing between ads in Instant Articles, and we made a number of incremental improvements over time to make it better and better from a publisher perspective.

Today, we’re talking about a couple of additional improvements. The first is, we’re going to be, over the next few months, supporting larger ad units. This is important particularly for publishers who sell directly into the ads on Instant Articles. Because they want to be able to sell, across all of their properties, the same ad units.

And on their mobile websites, or their mobile applications, a lot of times they’ll have larger ad units or even custom, premium ad units. And historically, we haven’t supported those within Instant Articles, but over the next few months, we’re going to start. So I think that’s going to make a big difference, and it was one of the things that was really born out of the feedback we got from partners.

The second is, we’ve started just recently supporting video and carousel ads for publishers who are using audience network within Instant Articles. Those are two of our best-performing ads on the audience network. And so enabling those for Instant Articles should also help publishers with monetization when they’re not selling the ads directly but instead working on using the audience network for monetization.

Could you tease out the distinction between premium ads and some of the other ads that people might be familiar with?

Within Instant Articles, publishers have the option to sell the ad inventory themselves through their own sales teams and keep all of the revenue. We don’t take any of that revenue. Or, they can use audience network, which is our ad network that we currently run across the mobile web and across mobile applications for third parties, they can use audience network ads within Instant Articles for any ad inventory that they don’t sell themselves directly. And in that case, we have the traditional revenue split that we use across all of audience network.

Way back when Instant Articles was first disclosed, a couple of years ago now, people wondered whether publishers were going to lose sovereignty over their own content by publishing it within Facebook. Can you can talk about Facebook’s philosophy on that, and if it’s evolved at all or whether it’s remained relatively consistent?

I think it’s remained consistent. One of the things that we’ve always done and continue to do is respect the publisher’s brand on Facebook. The publisher’s fonts, their masthead, their iconography is all reflected in the articles that people read on Facebook. And I think that’s something that’s always been really important to our partners, something we’ve gotten a lot of feedback on and we’ve incorporated into our product and take the time to really do justice to.

I think the inspiration for this product was coming from a place where we saw a lot of people on Facebook engaging with news and information and articles but having an experience that was just a much worse experience than any other content type that they were engaging with.

When they watched videos, they loaded instantly and they played in a very native way. When they saw photos, they felt very native. Text on Facebook was a native experience. But clicking on an article link took them to a mobile web browser that took a long time to load. And so our goal was to improve that so people would engage with the content that our publishing partners are producing. And do it in a way that still respects the partner’s brand and their content. I think we’ve honored that.

How is Facebook making changes to branded content and video to help publishers make money?

Branded content is a format that a lot of our partners have been doing for awhile on Facebook. This is where publishers create a piece of content that is a story that has a sponsor associated with it. Sometimes the sponsor is integrated into the story, and sometimes the sponsor is mentioned as the sponsor of the content. For a long time, our policies didn’t allow companies to do that on Facebook.

In April, based on Feedback from partners, we made the decision that we were going to support branded content on a platform with a requirement that when a publisher that’s publishing a story that’s sponsored, they have to tag the sponsor in the story, just so it’s clear to people who are consuming that story that it’s an advertisement.

Since then, we’ve seen a lot of innovation from partners who are excited about this format, who are recognizing the opportunity to monetize their audiences on Facebook through this type of sponsorship. And now that it’s something that we’ve blessed and that we’ve created real tools to help them do well, we’re seeing a lot of great examples.

There’s a publication called Tasty which is owned by BuzzFeed that does these short recipe videos, and oftentimes will integrate sponsors into the recipes. So one that they did recently was a salad dressing with Ciobani, the Greek yogurt was one of the ingredients in the salad dressing. It’s a story that a lot of people liked to engage with, they had over 30 million views of the video, and it was great product placement for Ciobani.

The things that we’re going to be introducing now are more robust insights. For multiple campaigns that are run by the same advertiser, our partners want to be able to collapse those and understand the performance of all of those together. That’s one thing we’re going to be introducing soon.

The other is the ability for publishers to tag multiple sponsors in the same post. So if you have a post that’s sponsored by an apparel company, you can tag both the apparel company and the retailer where that apparel might be for sale in the same post. So you can have multiple sponsors of the same kind of content.

A few months ago, there was a story in The New York Times that mentioned 85 cents of every advertising dollar in the first quarter of this 2016 would be spent on Google or Facebook. Given that statistic, can you talk about the advantages of publishing natively on Facebook? Should news publish on Facebook at the exclusion of posting stories on their websites?

It’s certainly not something that publishers should or are doing to the exclusion of their websites or their own mobile applications. And in fact, audience network is a system that we’ve built to help publishers monetize their mobile websites and their mobile applications.

For engaged readers, that’s the way they’re always going to consume their content. They’re going to go directly to The New York Times or The Washington Post if that’s the way that they consume the news.

Facebook is another way that people can discover content from publishers. And what we’re trying to do is work closely with these companies to understand how to best serve their readers and help them make money from that in the process.

And I would say it’s more than just Instant Articles. Our branded content policies that we announced a few months ago are an important part of this and more and more news companies are monetizing through branded content, so we’re unlocking that opportunity for them and trying to partner with them to help take advantage of that opportunity. And then video is also becoming an increasingly important part of these companies’ business models and that’s another area where we’ve been experimenting.

What’s the ideal mix of sponsored content to publisher content?

It’s different for each publisher. The key from a publisher perspective is to always produce great content so that people who are following them on Facebook continue to engage with it. Some of the sponsored content is better than the non-sponsored content.

It’s just really well-done. The sponsorships are integrated in a seamless way. They don’t feel overly commercial. And publishers who do that well are able to have a relatively high percentage of the content that they publish sponsored. But the important thing is not what that percentage is. The important thing is the quality of what they’re publishing. Because that’s ultimately what’s going to get their audience keep coming back to engage with their videos or their articles or their photos or their text posts, et cetera.

I think much has been made over the last six months or so about Facebook’s pivot to video. Last I checked, you couldn’t monetize native video on Facebook. Do I have that wrong? Is native video monetizable at this point?

Going back to my opening remarks, one of the things we’ve been hearing more and more from partners is that they want to be able to be making money from the content they’re producing on Facebook directly. And, as you said, video is definitely the future and where a lot of our partners are investing heavily and where we’re seeing a lot of engagement from people on Facebook.

So we started to experiment with monetization with partners with suggested videos. And then, more recently, in the last six months, we’ve really been focused on live video, which is a really exciting new format that’s unique and really taking off on Facebook. And so one of the things that we’ve been testing recently is a way for people who are creating live video on Facebook to make money directly from those videos.

Not in the suggested videos channel, but in the live video itself, with something we’re calling ad break. This is a way for a publisher of a live video to pause the video for an ad to appear and then resume their live publishing after that. It’s very, very early, we just started testing it, but we’ve seen some promising results. And so we’re going to be expanding that over the next few months to the rest of the live video on Facebook. And next year, we’re going to start thinking about how that type of monetization opportunity could potentially be brought to regular videos as well.

Do you see the ad break module being applied to other native video as well?

Next year, we’re going to be looking at ways to apply the ad break model to regular videos on Facebook, videos that are not live. Videos that are producing and publishing. We’re not there yet. Over the next few months, we’re going to be expanding the ad break within live videos. But early next year, we hope to be able to talk more about how that same idea could apply to regular videos as well.

Do you envision a model wherein the publisher could either sell that ad break directly or use a Facebook network ad, just like they do with Instant Articles?

We haven’t gotten there yet. It’s still early days. We’re experimenting with the format and understanding how people engage with these ads. We’re understanding how producers are thinking about how the ad would fit into their content. So once we get further along, we’ll have more to share on how we think about some of those.

But I think the key thing here is that the inspiration that we’re really working toward is a world where our partners are able to monetize their content wherever they’re viewed on Facebook, and moving away from the suggested videos experience. We’ll still have a way for consumers to watch video-only feeds, and we’ll still have a way for partners to make money from those feeds, but the monetization will be within the videos themselves as opposed to from ads that appear between videos where it’s hard to attribute who should get credit for it and where the monetization doesn’t apply to other surfaces within Facebook where those videos are consumed.

I wonder if you could say a little about whether you think journalists can subsidize or support their businesses by publishing exclusively on Facebook?

You should only do it if it does make sense for your business. And it’s our job to help you understand why and how it can make sense for you. That’s why we have a huge team of people in my organization that work directly with our media partners to help them make that decision.

The reasons to do it are: A lot of people are going to come across your content on Facebook. And if there’s way to make that experience really seamless for them, we think it will lead them to engaging with it more on the data we shared earlier about the 25 percent lift on Instant Articles seemed to validate that.

And then within that, we’re committed to continuing the work to make the monetization of these media products really work for partners. And that’s all the way from the improvements we’re making in expanding and offering on Instant Articles to all of the work that’s going into Sponsored content, to the future work that we’re going to be doing on video, and any future formats that start to emerge as exciting opportunities. We have 360 video, obviously we’re excited about virtual reality and other things in the future things as well.

But our commitment to our partners is that we’re going to keep working to see if there’s ways for us to unlock value. And at the end of the day, partners should only do it if we are actually unlocking that value for them.

You probably saw that recently article by Emily Bell — “Facebook is eating the world.” It talked about how consumption and distribution has been radically shifted over to Facebook because that’s where people are spending all of their time. And I wonder, from a 30,000-foot perspective, does Facebook see the future of news distribution on its platform?

It’s definitely the case that a lot of people are discovering news on Facebook, and we recognize that we’re playing a big role. And we take that responsibility seriously. It’s the reason that we’ve been talking so much about News Feed recently. With publishing our News Feed Values and talking about the three pillars of News Feed, helping people connect, inform and entertain

And we’ve been moving to be much more transparent with all of the changes that we make to News Feed. Helping our partners understand how we’re evolving News Feed over time. We definitely take that seriously. We have a large number of people who are engaged with our partners in the news industry to help them understand the opportunity that Facebook is hopefully presenting for them in terms of reaching new people in terms of engaging people and making money.

We know that in order for publishers to ultimately be able to continue creating the great content that people want to consume on Facebook, they have to have a successful business. And that’s something we’re also committed to, which is why we’re talking about all of the things that we’re doing today.