Facebook Inc FB is gaining a lot of momentum with its newly launched streaming service, Facebook Watch.
A+E Networks' new short-form series "Bae or Bail" reached over 24 million viewers on the platform. Traditional networks are taking a liking to the new platform, and we will likely see many networks try to expand their digital footprint.
With Facebook diving headfirst into streaming content, given its history with over-reporting or miscalculating its viewer reach, the real winner could be third-party measurement firms, comScore and Nielsen Holdings PLC NLSN, according to a new report from Pivotal Research Group.
“In recent days, items related to Facebook’s video initiatives caugt our attention. The company has long sought to expand beyond the digital advertising budgets that it and Google dominate. As the medium with the most significant budgets historically, television budgets have served as a natural target,” said Pivotal Research analyst Brian Weiser.
According to Weiser, reaching a large number of people was not enough for Facebook to accomplish its goals in video.
“Tv advertisers generally want reach paired with video ad units while also borrowing the brand equity associated with premium content. Unsurprisingly, this reality has required Facebook to change its approach,” said Weiser.
This led Facebook to launch Facebook Watch.
Although facebook has demonstrated that it is willing to spend billions of dollars to buy rights for content that might otherwise appear on TV, if a subscription model is not introduced, revenues will be entirely supported by advertising. This means that third-party advertising measurement firms will be of critical importance moving forward, giving the skepticism surrounding facebook’s internal advertising figures.
“While we think the company is positioning itself to compete for TV budgets with TV-like content, we think that the large marketers who dominate TV advertising will only do so after applying significant scrutiny to the metrics associated with Facebook campaigns,” added Weiser.
NBC, perhaps threatened by Facebook Watch, took the Facebook’s metric mishap as an opportunity to sell its advertising value proposition.
Pivotal Research maintains a Sell rating on Facebook with a $140 price target. The firm also maintains a hold rating on Nielsen with a $38 price target.
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