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Introduction

This report seeks to identify how and why Facebook video advertising revenue will grow over the next five years and to assess its impact on various players across the TMT ecosystem.

Highlights

  • Although growth will be dynamic across all regions, the US will account for much of Facebook's video advertising revenue growth over the next five years.
  • Facebook is moving closer to TV. Although its impact on TV advertising will be minimal over the next five years, Facebook will increasingly seek to poach TV ad spending by creating a more traditional-looking video ad ecosystem and competing with the likes of Netflix and broadcasters in acquiring exclusive video content.

Features and Benefits

  • Assesses the impact that Facebook and its recently launched Watch platform will have on the broader TV and digital video advertising markets.
  • Identifies the opportunities and challenges posed by Facebook video to media companies, technology vendors, and operators.

Key questions answered

  • How much revenue is Facebook generating from digital video advertising, and how will this change through 2022?
  • What are the main challenges faced by Facebook in the digital video advertising market, and how can other players compete?
  • How is Facebook's ad ecosystem and content strategy changing as it moves closer to TV?

Table of contents

Summary

  • Catalyst
  • Ovum view
  • Key messages

Recommendations

  • Recommendations for content providers
  • Recommendations for vendors

Facebook’s impact on AVOD will remain limited, despite the launch of Watch

  • Watch marks Facebook’s attempt to turn itself into a “go-to” video platform

Facebook is moving closer to TV

  • Watch and in-stream ads will make Facebook a viable, more traditional ad-based video monetization platform
  • Facebook needs premium video series to boost uptake of Watch

Bad ad experiences for consumers and brands weaken Facebook’s threat to TV

  • Facebook still can’t measure up to the premium TV experience
  • Intrusive and unwanted ad formats threaten to put off consumers

Instagram offers the biggest video ad opportunity away from Facebook

  • Video advertising already well established on Instagram, with further room for growth
  • Traditional video ad opportunities remain limited on Facebook’s messaging platforms
  • Facebook VR and AR video advertising still a long way off

Appendix

  • Methodology
  • Further reading
  • Author

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