Facebook courts creators with performance-based payouts for its ad formats

Changes are coming to Facebook ads. In hopes of attracting more creators on its original platform, Meta is ushering in a monetization system structured around performance-based payouts.

Previously, Facebook gave creators 55% of the ad revenue generated by video ads. That rate was a fairly standard deal, but Facebook is now coming back to creators with new terms: By paying creators based on the number of views they generate, Facebook will introduce a financial structure that suits all of its ad formats (and not just pre-rolls on long-form videos).

The performance-based model is already available on Facebook Reels, where it replaced the defunct Reels Play program. Facebook now intends to do more with that structure. Creators can opt into the new payouts by enabling Ads on Facebook Reels. From that point on, they’ll generate revenue as their Reels get views. Even views that don’t come with attached ad impressions will qualify for payouts.

Though the new ad terms could result in volatile earnings for some, Facebook believes its new monetization option offers several perks. At an event in New York, Facebook Senior Director of Product Management Helen Ma 

told attendees that creators who increase their activity on Facebook can harness the platform’s incredible scale. Facebook’s global monthly active audience reportedly tops three billion users, compared to about one billion monthly users for TikTok.

Another advantage is simplicity. With a model based on raw traffic numbers rather than ad impressions, Facebook is throwing a bone to creators who might be confused about industry terms like CPMs.

Meta is not the first social media company to adopt a performance-based payout structure. TikTok performed a similar pivot when it discontinued its fixed-pool Creator Fund in favor of revenue streams that can be prorated based on traffic numbers.

On another Meta-owned platform, Instagram, the influencer marketing business is still booming. Meta will continue to load up its new platforms with new ad formats, and the new payout structure is designed for creators who want to utilize multiple revenue streams. Will those creators show interest in increasing their Facebook activity? The platform’s creator team is hoping the answer is yes.