With a population approaching half of a billion users, if Facebook was its own nation it would be the third largest in the world behind China and India. With that in mind, it’s no surprise that secondary activities on Facebook – like viewing videos – can still produce high rankings for the site that compete with the likes of Hulu and YouTube . One of the ways users on Facebook view video is through advertisements, and a recent study by TubeMogul revealed some interesting stats on which ones worked, and why. Sponsor TubeMogul studied the various forms of video advertising displayed throughout Facebook, including in-banner video, interstitial and virtual currency ads. Virtual currency ads are served to gamers who receive points or virtual money within a game in return for completing them, and they turned out to be one of the best methods of attracting traffic. You Scratch My Back, I’ll Scratch Yours According to the study, around 43% of virtual currency ad viewers completed the entire ad, and roughly 52% watched at least three quarters of the ad. These numbers just barely inch out those of in-banner and interstitial ads, but where the virtual currency ads excel is in click-through and share rate. By rewarding viewers for completing ads, advertisers see a click-through rate double that of in-banner ads and over 5 times that of interstitial ads. Users share these ads on Facebook and Twitter roughly 50% more than in-banner ads and around 6 times more than interstitial ads. Additionally, virtual currency ads are watched 6 seconds longer than in-banner ads on average, and nearly 5 times longer than interstitial ads. The most intriguing statistic from the study, especially for advertisers, is the price of these ads compared to how long they are watched. The study found that virtual currency ads average $0.22 per minute viewed, nearly identical to the $0.23 cost for interstitial ads. In-banner ads, on the other hand, averaged $6.27 per minute viewed. How Facebook Ads Stack Up Against Web Benchmarks But how do these Facebook ads compare to ads placed outside of the site. TubeMogul used an off site benchmark to gauge the advantage or disadvantage of using Facebook for video ads. The study found that Facebook users are nearly twice as likely to finish watching ads than they would outside of the site, but click-throughs for the benchmark ads were higher than in-banner and interstitial Facebook ads. Virtual currency and in-banner ads are watched between 9 and 15 seconds longer than offsite ads, but the offsite ads tend to be better value to advertisers than many Facebook-based ads. Targeting Ads at User Behaviors User behavior seems to play a large role in determining which Facebook video ads work the best. By rewarding game players with virtual currency, advertisers see higher click-throughs, longer watch times and higher value from their ads. Interstitial ads, which pop up as users navigate through games and apps, garner just a fraction of the view time and click-through rate despite being cheaper to implement. Interstitial ads seem obtrusive to users since they only appear at the exact moment a user has clicked to navigate from one screen to another, so it makes sense that users close them quickly in frustration. By offering Facebook users with rewards for watching videos at their own discretion, advertisers attain much higher view times and click-throughs. Discuss

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Local business review site Yelp held a press phone call this morning to discuss major changes it’s making to its site and business. Faced with class action lawsuits by business owners alleging they’ve been extorted by Yelp, the service has decided to make filtered-out reviews publicly visible and has removed the option for advertisers to push their favorite review to the top of their business’s page. Did Yelp just cry Uncle? Is this the beginning of the end for its most important revenue stream, as some have argued? Here’s what we found most interesting about the call today. Sponsor Yelp Gets Hit Hard With Questionable Reviews Surprise, surprise – there are a lot of people out there who appear to be trying to game Yelp. This morning the company added a link at the bottom of each business’s page to “filtered reviews.” Those are the ones that the Yelp algorithm determined weren’t trustworthy enough to display on the site. They used to just disappear into a mysterious black hole, something many people found suspicious. Now you can look at them, and most of the time you can see why the reviews were yanked. There are a lot of them, too. CEO Jeremy Stoppelman said he hoped exposing these buried reviews would put to rest the “myth” that the company buries positive reviews if companies don’t buy advertising and will give site users a chance to see the “unique challenge we face.” Did Yelp Just Kill The Golden Goose? Some critics have alleged that the ability to put favorite reviews on top of the page was the most compelling thing Yelp had to offer advertisers. The new video slideshows aren’t nearly as compelling as highlighting the good news and pushing down the bad news, they say. Stoppelman offered a relatively convincing response to that when we asked him about it. He said that search placement is actually the biggest thing advertisers are paying for. “Favorite reviews” have limited draw, he said, because the site’s natural Yelp Sort algorithm already displays reviews with a businesses’s average rating or better at the top of the page automatically. He also said that round tables of business owners across multiple cities identified video advertising as the best possible substitute for the feature. Consider me convinced. Complainers Are Just Complaining Are businesses that complain about Yelp just upset that Stoppelman has built such a compelling site they feel obligated to advertise there, we asked? The Yelp CEO said in response that many small businesses are used to advertising in the newspaper and on radio and that the traditional local advertising market has been disrupted by Yelp. “Yelp represents a shift in the local business landscape,” Stoppelman said. “When those shifts happen, you’ll see some people lose out and then they’ll register their complaints.” Do Yelp sales people pressure local business owners into advertising on the site? Do they wield the relative placement of positive and negative reviews like a weapon? It’s hard to know what goes on in those conversations, but there are certainly countless business owners who are accustomed to paying for pure positivity in the form of traditional advertising and for whom the presence or risk of negative feedback on a site like Yelp is alarming to the core. As Craigslist founder Craig Newmark said in a blog post today , “By the end of this decade, power and influence will shift largely to those people with the best reputations and trust networks, from people with money and nominal power.” That’s where Yelp operates and it represents a change in the world. Yelp’s changes today seem like wise ones to me. This kind of transparency is likely to be helpful as the world of local business becomes more complicated thanks to the internet. Discuss

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When it first started a few years ago, only huge corporations could afford to do marketing with video. The main reason for this was because there were not companies out there that specialized in making advertising videos. The larger companies could afford to use their own resources to make their own videos while the smaller [...]

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