Facebook putting ads in News Feed, its core money maker, it is now turning to its other platforms – WhatsApp, Messenger, and Instagram – for revenue growth. According to a report in ReCode, Facebook has determined that it can’t put more ads into users’ feeds without harming their experience.
“The industry term for this is the ratio of ads to other content, called ‘ad load’, and Facebook says News Feed’s ad load is all maxed out hinting that its revenue growth might slow down ‘meaningfully’ this year due to this,” the report said on Saturday.
So Facebook has now started selling mid-roll video ads and funding video projects that could host those ads. The company is even paying video publishers to make TV shows for Facebook.
It started selling ads inside Instagram Stories and on the same feature on its other platforms like Messenger, WhatsApp and Facebook itself. Facebook was in Cannes to sell and educate ad buyers on Messenger ads just last month, the report added.
Last month, its CEO Mark Zuckerberg announced that the platform has two billion users. Currently, WhatsApp has 1.2 billion users.
Marketplace ads are being tested on some people who use the feature in the U.S., allowing advertisers to place ads within Marketplace free of charge. In fact, at the moment Facebook’s just treating Marketplace ads as News Feed ads in a different place – not an entirely separate ad product.
It’s also not even clear if, or when, Facebook might launch them properly. As Michelle Bonner Techel, product marketing manager at Facebook explained,
We are starting a small test that shows ads to a small percentage of people using Marketplace in the U.S. and will evaluate the response before determining how we move forward,
Marketplace might not be a huge success yet, but the company seems to think highly enough of it to add adds to it. On the other hand,
Facebook makes most of its revenue from ads, and since it’s running out of ad space on News Feed, it seems desperate to find other places to show its ads – among them, Messenger of course.
As far as Instagram is concerned, it has over 700 million monthly active users. Instagram did $2 billion in revenue in 2016 and is expected to grow to $22 billion by 2021. In comparison, Facebook did almost $27 billion in total ad revenue in 2016.