In July, Facebook made a big move into YouTube's turf with plans to launch Suggested Video—a feed of curated video clips from brands like Funny or Die, the NBA and Tastemade. After a small test over the past three months, it's now showing up in more mobile news feeds.
Clicking on a video from a news feed leads to a page that pulls all of the publisher's videos together in a stream, as well as other related clips.
To help publishers make money off those clips, an ad appears between every few videos, similar to a commercial. Similar to YouTube's business model, creators receive 55 percent of money sold from the ads while Facebook gets 45 percent. All video ads are sold by Facebook.
The program is geared specifically for iPhone viewers, since a majority of Facebook's traffic comes from mobile, to help publishers squeeze some extra money from clips watched from a smartphone.
The stream pulls in video ads that brands have already bought, meaning that marketers are not paying extra money to get their clips to appear in the new section.
During a small test on Thursday and Friday, ads for Under Armour, Procter & Gamble, Taco Bell, Jet Blue, Target and KFC were playing alongside publishers' clips.
Back in July, Patrick Starzan, vp of marketing and distribution for Funny or Die, talked to Adweek about the program and how the ad portion will help it monetize the three to six videos the comic site posts to Facebook each day.
"We want to showcase our content and get as many eyeballs as possible," Starzan told Adweek. "The rub for us though has always been we can't monetize on the platforms. It's not a good business case for us to just upload all of our content to Facebook and have everyone stay there. To be a part of this is beneficial to us because now we can test out monetization at the platform level and see if it makes sense for us."
Indeed, publishers are itching for more money off of Facebook video clips. In Facebook's latest quarterly results, 76 percent of its $3.83 million of ad revenue came from mobile.
Just this week, Sheryl Sandberg pitched a room of agencies and brand marketers at Advertising Week on Facebook's size as equivalent to a Super Bowl.
"What people are starting to understand is that what we offer is really broad reach—we have a Super Bowl on mobile in the U.S. every day," Sandberg said. "Our data says that if you do TV plus Facebook, you enhance your reach by 17, 18 percent and more than double that for millennials, which is a hard group to reach right now on TV."