15 September 2014

Advertising Age: “Facebook’s Strategy to Take on YouTube Comes Into View”

But for an ad-supported business like Facebook, views are only as valuable as the revenue they generate. While YouTube videos viewed on Facebook contributed some percentage of the estimated $5.6 billion YouTube reaped last year, Facebook didn’t make a cent.

That may be why Facebook is shining a light on its own video player privately in meetings with online video execs and now publicly with its view count. Coupled with its acquisition of video ad-tech firm LiveRail and introduction of autoplay video ads, Facebook appears poised to make a run at YouTube’s business. In one big way it already has.

Tim Peterson

I’m sure would love to get a piece of the online video ads pie, but I think there are several factors working against it.

The recent changes to the newsfeed ranking algorithm have emphasized content from ‘friends’, reducing the reach of pages, to their discontent. If publishers have to pay Facebook first to insure their videos rank highly in peoples’ newsfeeds, this will reduce their revenues from advertising on Facebook, making it less lucrative to contribute. Of course, Facebook could always change the ranking algorithm again to push its native videos (there are some suggestions it already does), but that could annoy people, especially on mobile. You have to take into account that, unlike YouTube, Facebook is not a dedicated video portal, so video content has to compete with a number of other updates, especially friends’ photos.

The articles also talks about the poor discoverability on , but I think that is a moot point. People have many ways to find YouTube videos, starting with Facebook, but also search and YouTube’s own search and recommendations. The greatest thing about YouTube (again as opposed to Facebook) is that the majority of videos are posted publicly for anyone to watch – even without an account! The content can also be embedded on other sites, something that Facebook is still working on. From this perspective, I think video ads would work a lot better on Instagram. As this article mentions in the conclusion, while the audience numbers look comparable (1 billion monthly viewers for YouTube vs. 1.3 billion monthly visitors on Facebook), it’s more relevant to compare video views, where YouTube has a clear lead.

This doesn’t mean Facebook couldn’t become an important player on the video ads market. As we saw with LookBack, there is huge viral potential from video, but that experiment was built around social interactions, not publisher-to-consumer. I just think there is more work here for Facebook than just copying the successful YouTube model.

Update: more insight on the subject:

First of all, Facebook started auto-playing videos in the newsfeed, and they count a view if they are viewed for 3 seconds or longer.

In other words, we have no way of knowing if video is actually growing at all, or if it's simply the result of it being counted when people scroll down their news feed.

Thomas Baekdal

Post a Comment