How the Reels overlay placement works
A Reels overlay ad is not a clip of its own. It is placed on top of somebody else’s organic Reel while that video is playing — as a banner across the lower part of the screen, or as a sticker sitting inside the frame. The video underneath keeps running. Nothing is interrupted, so there is nothing for the viewer to skip.
Everything else about buying it is ordinary. The overlay is another placement inside the same ad set, turned on by leaving placements open or picked deliberately in manual placements. The objective, the audience, the bidding and the budget are unchanged. What changes is the space you get: a small panel, an image, a few words and a button, sitting over content the viewer chose.
Why the Reels overlay placement matters
It reaches the same audience as the full-screen Reels placement without asking them to give up their attention. That suits reminding far better than introducing — a business the person already recognises, a product they have looked at before, an offer that can be explained in one line.
It also picks up inventory the full-screen placement cannot, because it runs alongside content rather than in place of it. In a small auction, which is the normal situation for a business targeting a single city or a niche audience in Nepal, extra eligible inventory of any kind lowers the pressure on the rest of the campaign.
Where Reels overlay goes wrong
The first problem is asking too much of the format. A message that needs a demonstration, a comparison or a build-up has nowhere to go in a banner. If the idea cannot survive as one readable line and a clear button, this is the wrong placement for it and the budget should sit elsewhere.
The second is trusting clicks. The overlay sits over content someone is actively watching, and taps on a small panel in that situation are not all deliberate. A placement report can show plenty of clicks from overlays and almost no enquiries behind them, which looks like success in a traffic campaign and like nothing at all in the bank.
How to act on it
Leave it running inside open placements to begin with, because narrowing an ad set to a single surface usually raises what you pay everywhere else. Write for the space you actually have: one short line, a recognisable image, a plain button, and no small print that will be unreadable at that size.
Then read the placement breakdown in Ads Manager on cost per result, and on the quality of what arrives, rather than on clicks or click-through rate. If overlays are producing cheap traffic that never becomes an enquiry, exclude that one placement rather than cutting the budget of a campaign that is otherwise working. Review the decision when the creative changes, because a different image can change the answer. Placement tuning of this kind belongs inside ongoing Meta ads management rather than in the initial setup.