"Facebook and Instagram are synonymous with mobile and the next frontier is mobile video and to become synonymous with that," Carolyn Everson, VP Global Marketing Solutions said at a JPMorgan tech, media and telecom conference.
Facebook is now seeing more than four billion daily video views and the company notes it's working with its clients and advertisers, both large and small on its video ad units. Everson noted that 47% of value from a video is created in the first 3 seconds, with 74% of value created in the first 10 seconds, so shorter form video is better, especially on mobile. Everson noted that a lot of video is consumed with the sound off, depending on whether the person is, so marketers and brands need to think about in context with traditional TV ads, which are generally watched with the sound on.
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Everson noted that though people tend to think about video advertising from a larger brand perspective, Facebook has more than one million small businesses using this as brand perspective to develop video ads target their customers.
There's an opportunity for Facebook to continue getting more advertising dollars from traditional venues, especially as the world turns to mobile, but Everson noted it will take time. Consumers are now spending a quarter of their time on mobile, while Facebook, combined with Instagram, see around 20% of consumers time. "We have opportunity to grow there, but I want to emphasize it takes time to change an ecosystem that has been operating a certain way for decades," Everson said at the conference.
The revenue potential for Facebook, as it fights off YouTube, is enormous, according to research firm eMarketer. In 2014, digital video ad spending totaled $5.81 billion in 2014 and is expected to go to $7.77 billion this year, while mobile video ad spending is expected to rise to $2.62 billion in the U.S., leaving plenty of opportunity for Facebook to capture market share.Mobile advertising as a whole totaled $42.63 billion in 2014 worldwide and is expected to reach $68.7 billion this year, according to the research firm.
Everson and Facebook CFO Dave Wehner also touched on several key initiatives, including the company's three-, five- and 10-year spending plans. "Over the three-year term, on the growth side it's about driving DAU (daily active users) and MAU (monthly active users) as well as engagement on the platform," Wehner noted. "And we're also focusing on revenue on the monetization side."
The company also has longer-term plans, which include building an ecosystem for its services, including Facebook-owned Instagram, WhatsApp and Facebook Messenger (five years) and investing in virtual reality, the company's Internet.org initiative and artificial intelligence (10 years).