Analysis: Will cautious advertisers step into the world of gaming with FB's new ad formats?

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Facebook is wrestling for dominance in the gaming scene with its latest ad format, Live Breaks, designed to offer gaming creators more control over the ad experience for their viewers. According to Facebook, Live Breaks are longer ad breaks that allow creators to step away, stretch and take a quick break while keeping their audience engaged.

The new format blends creator-generated content such as clips and highlights with a traditional ad experience. These breaks are manually triggered 90 or 180-second intervals. Meanwhile, it has also expanded Live Ads with all partnered gaming creators. Users watching a live stream from its partners may see a pre-roll ad that runs before the live stream, an image ad that appears below the livestream, or a new format in the form of a mid-roll ad that plays in the main video platform during the live stream, while the broadcast keeps playing in a smaller window. The company added that it is starting to beta test ways for partnered creators to monetise their previously live streams in the form of pre-roll, image and mid-roll ads.

Additionally, it is also opening access to Fan Subscriptions to more Level Up creators, more specifically those who achieve 250 returning weekly viewers. This will begin in Thailand, Australia, Brazil, Canada, Mexico, UK and US, with plans to expand globally. The Level Up programme is designed to give emerging creators information and tools to help jumpstart their live-streaming communities on Facebook and potentially earn money for their work.

According to the State of Stream Q4 December 2019 report by live-streaming platform StreamElements and influencer discovery analytics platform Arsenal.gg, Facebook Gaming had a huge growth last December compared to December 2018. Its market share jumped from 3.1% to 8.5% in December 2019. Facebook Gaming also saw a 210% increase in the number of hours watched, 6% increase in streamers with 63% more hours broadcast per unique streamer on average. Meanwhile, Twitch's market share stood at 61% last year while YouTube Gaming's was 27.9%.

facebook gaming market share streamelement

Attesting to its success, recently Microsoft announced that it is shutting its video game live streaming platform, Mixer, and teaming up with Facebook Gaming. In a blog post, Mixer explained that it became clear that the time needed to grow its own live-streaming community to scale "was out of measure" with the vision and experiences that Microsoft and Xbox want to deliver for gamers now. As such, the company has decided to wind down the operations side of mixer. Beginning 22 July, all Mixer sites and apps will redirect users to Facebook Gaming, and this move comes four years after Mixer was founded.

Meanwhile, Facebook also unveiled a Facebook Gaming mobile app in April, according to to multiple media reports including the New York Times, BBC and CNBC, aimed at taking on Twitch and YouTube. In 2019, Facebook launched a dedicated Gaming tab for users to find their favourite gaming content in one place. The company expanded its Gaming app to Mexico, Thailand and a full roll out across Latin America at the end of 2019, after initially beta testing it in the Philippines and Brazil. The app builds on the tab announced in March 2019 but includes additional features.

The subsequent launch of the app on Google Play in April this year offers a focused-only gaming experience for users to watch their favourite streamers, play instant games and participated in gaming groups. According to Facebook, 700 million consumers use the platform every month to play games, watch gaming videos or engaging in gaming groups. There are more than 100 million monthly active users in over 340,000 gaming groups on Facebook.

Mobile gaming is predicted to account for 48% (US$77.2 billion) of the total global games market this year, according to the latest figures from Newzoo. Under mobile, smartphone games will amass about US$63.6 billion in revenue while tablet games will have US$13.7 billion. According to the company, the global games market will witness a 9.3% year-on-year increase until US$159.3 billion. Besides mobile, console and PC will contribute US$45.2 billion (28%0 and US$36.9 billion (23%) in revenue respectively.

newzoo 2019 global games market per segment 1

Jamarr Mills, senior planning director at Essence, told Marketing that the new Live Breaks and Live Ads are smart ad formats that build on the increase in long-form content consumption occurring in digital platforms. "Formats that interrupt user experience and behaviour less and naturally fit into the experience are more valuable. If creators are strategic about how they leverage Live Breaks and Live Ads, they can provide a new dynamic for brands where ads are less annoying and more complementary to the gaming ecosystem," he said. Mills added:

Live Breaks will likely create an easier entry point for brands which have previously been apprehensive to gaming, as the insertion format is similar to tactics run in other offline and online channels.

He also added that higher time spent and relevancy are ambitions for any brand when it comes to shifting metrics. As such, Live Breaks help accomplish these ambitions as gamers dedicate a lot of time to being active participants in content both as players and viewers. "As gaming is still a nascent line item for brands, advances in one platform help open doors for all parties, especially for some of the more established ones, in the space," Mills said.

Meanwhile, Reprise Malaysia’s client service director Kim Chew said brands will need to determine if Facebook game streaming is their platform of choice, as opposed to YouTube or Twitch. They also need to explore how best to gain value from gaming beyond the traditional approach of sponsorship as a way to partner with gamers. At present, Facebook is not as established as other competitors in game streaming. As such, Chew said it is quite natural for Facebook to expand its offering to entice creators to stream on their platform instead.

She explained that brands will likely explore Facebook Gaming as an additional ad placement to reach youths. “Platforms such as Twitch and other competitors will need to be on the lookout as Facebook has been increasing efforts over the past few years to encourage quality content so as to retain audiences from moving to other competitors for content,” she explained.

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