Listen. I’m about to share a secret.

I’ll probably be ostracised from Facebook for sharing it with you. But, hey, it’s a US$300 billion global force, and I’m just one curious guy who happened to look where I couldn’t help it while wandering around its massive Frank Gehry shed.

I’m sure the company will get over it because the secret was hard to avoid.

Facebook's headquarters hold secrets.
Facebook's headquarters hold secrets.

In fact, it was directly in front of me — in Facebook’s in-house newsletter, The Weekly Push — right above the urinal in the bathroom. There was nowhere else to look.

And, looking back now, more people should have paid closer attention to one of the Push’s research projects before they returned to their six-seat work pods.

Because that project already had the answer to what would happen to the imminent rollout of Facebook’s Suggested Videos.

But, like a Steve Jobs presentation, you’ll have to keep reading a bit longer before I reveal the good bit.

The bathroom pit stop came just after Facebook had given a really insightful and generous briefing on its latest strategies, including Instant Articles, 360, Live, and Suggested Videos.

Yes, you all know about Suggested Videos now. Of course, you do.

But back then — waaaay back in November of last year when I was at Facebook as part of the INMA Silicon Valley Study Tour — it was still a new and exciting trial concept. It was Facebook’s play against YouTube.

And this is the interesting thing about Facebook: The company was quite open in explaining how the idea had evolved from a hack project to global rollout within a couple of years, as well as the stumbling blocks it had encountered along the way.

Incidentally, the day before we’d been to Twitter, and that company really struggled to present a coherent vision of its future. Twitter seemed confused and defensive. Facebook, on the other hand, came across as more open and inclusive. (A former senior Twitter executive now at a rapidly growing Silicon Valley company later told me Twitter’s problem was it had one great idea but still hadn’t figured out a second one.)

You’ve got to remember that everyone late last year suddenly wanted to be in the news business. Apple News was on the horizon. Enough said. Twitter Moments was a thought bubble. Google AMP was still a PowerPoint presentation.

All the big Silicon Valley players suddenly wanted to jump into bed with old media.

Facebook’s importance to a potentially fickle global audience lies in its ability to connect those people with stuff they find interesting.

We know Facebook staff members are fast learners. They watch what their users do then try to anticipate what they’ll need next. But they also freely admit they don’t get everything right the first time.

Facebook started as a text platform, moved into photos, and then embraced video to try to keep up with the voracious appetite of their users.

It watched video views on the platform increase exponentially last year from 3 billion in January to 8 billion in September. The company stopped releasing those figures this year, but in February, Tubular analysed a single week and found that 1.8 million videos were uploaded, generating 31.6 billion views.

Facebook also noticed how the binge-watching generation wanted to consume more than one video at a time. And that video had become the most-shared medium for these people, with 53% of all video views coming from shares.

So to keep up with demand, Facebook needed video. Lots of it.

But not just any old video.

The company also realised that while most of its videos came from individuals, users liked sharing videos from media companies — both old and new.

Facebook’s challenge was to find a way to encourage those big companies pumping out quality videos to keep posting on Facebook and its vast reach rather than their own sites with smaller numbers but guaranteed pre-roll revenue.

Monetisation with partners, though, had never been part of any Facebook strategy before, so finding a business model was always going to be tricky.

“There’s a certain class of content which is only going to come onto Facebook if there’s a good way to compensate content owners for that,” Mark Zuckerberg said during the third-quarter earnings call last year. “We’ve recently rolled out the business model for this. We’ll give a revenue share on a portion of the views to content owners.’’

In trying to find that model, Facebook dismissed pre-rolls fairly quickly because it was a bad user experience. But it could see the potential benefit of post-rolls between auto-play videos.

This concept was fairly similar to traditional broadcast television. The user watches a couple of segments, then sits through an ad before watching some more videos.

On the face of it, the idea and 55/45 revenue split seemed a win-win solution.

Like most video-producing organisations, we plunged into increasing views on our Facebook pages. Some of the videos went global. The graphs were exponential. Our monthly stream starts were in the high tens of millions.

It was all looking very positive.

Then we checked the bank account for Facebook’s latest cheque.

Hang on, there were a couple of zeroes missing.

What had gone wrong?

Okay, here’s the reveal: The reason for the revenue failure of Suggested Videos was pinned above the urinal in the bathroom right from the beginning.

The research project in question had a really snappy title: The Thumb Is In Charge.

In essence, the company was researching what marketers needed to know about how we use our thumbs on mobiles phones — especially for commerce.

And guess why Suggested Videos failed to be a revenue goldmine for publishers?

Because of that damn thumb.

Instead of watching the ad in between the videos, people simply swiped past it with their thumb.

Kind of obvious in hindsight.

Users swiped past advertisements, causing publishers to lose out on revenue.
Users swiped past advertisements, causing publishers to lose out on revenue.

But this is not a criticism of Facebook.

Far from it.

At least it tried. And the company’s track record suggests it will learn from the revenue blip and come back with another plan soon. It is that kind of company.

The real challenge lies with those working in the advertising industry.

They are the ones who need to think differently and more progressively. They have played it safe for too long with video advertising. They need to find new ways beyond pre-rolls and post-rolls.

Facebook is not an advertising company. But it has shown that it wants to find a way for video advertising to work.

It is now up to the advertising businesses to experiment with getting a brand’s message to burst beyond the limitations of a small screen and a twitchy thumb.