Facebook to launch adverts on Facebook Stories

Facebook announced that it has reached a 150 million daily active user (DAU) milestone for its Facebook Stories. It’s the first time in 14 months that the company has broken its silence on the issue. Although it’s still short of the 300 million DAUs on Instagram and 450 million DAUs on WhatsApp, it signals a growing opportunity for the social media network.

More importantly, the company now plans to test adverts on Stories in the US, Brazil and Mexico.

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Given that Stories have picked up pace and may even outperform news feed posts for sharing, according to Facebook’s CPO Chris Cox, it’s not surprising that Facebook is rushing in to monetise it.

For starters, users in the select countries will be seeing 5-second to 15-second video adverts which they can skip. Click-through and call to action buttons are going to follow shortly, but won’t be part of the initial testing of the ads.

Interestingly, advertisers will also be able to cross-post their Instagram Stories adverts to Facebook Stories.  At the same time, Facebook is upping the measurement options to make sure marketers are going to give it go.

However, in order for Stories to become profitable, the company will have to sell a lot of good adverts that can deliver on engagement. That’s usually where competitor Snapchat has performed well with its Lenses and more creative AI ads.

The announcement certainly hasn’t been good news for Snap Inc which expects to make around $1.19 billion in ad revenue this year.

Zoheb Hajiyani, a Facebook product manager told TechCrunch:

“Ads in stories have added a lot of value for businesses on Instagram, and we believe we can do the same on Facebook. Ensuring that this is a good experience for people using the product will be our top priority.” 

It remains to be seen if Stories ads perform well enough. At the same time, it’s opening up another avenue for Facebook to generate cash. Whether this will hurt Snapchat in the long run is a question many in the industry have speculated on, but given Facebook’s wealth of data on its users it’s likely advertisers are happy to swap.

The one thing Snapchat continues to have going for it: its predominantly teen and millennial audience.

 

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