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Facebook’s denting into the YouTube-Led Video Market

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Last month we saw how Facebook is making aggressive inroads into the video streaming market currently dominated by Google’s Youtube, by offering free ad credits to publishers, artists and companies for promoting their content. Looks like those efforts have started bearing out fruits, and probably ahead of time.

A report by London based Ampere Analysis states that Facebook has already made huge strides into the market as it delivered two trillion video views via its platform. That is two-thirds of what world’s largest video platform delivers in a month. Youtube served 3 Trillion video-views during the same period.

Both the services have almost the same number of users in their database. However, Facebook does hold an upper hand in this regard, considering Facebook’s video viewers are all registered users, which means the company potentially has far more data on them which eventually comes out as a major factor for advertisers, who are now looking more towards targeted ads, rather than general video rolls.

This report comes ahead of the week-long Cannes Lions international advertising conference which is to open this week. Another research released alongside the Ampere report showed the relevance of video in the changing ad industry which has led to the competition between two giants.

According to the research by media-buying firm Zenith Optimedia, online video is now growing faster than any other digital category or subcategory, rising 33 percent in 2014, and is forecast to grow 29 percent a year through 2017. It further said that the Internet will overtake TV advertising in 12 key markets, representing 28 percent of global ad spending by 2017 which is projected to reach $531 billion (roughly Rs. 33,73,729 crores) this year.

This trend clearly shows the changing preferences of viewers when it comes to ad-viewing in internet era which has led the companies using videos as a medium to promote and market their products and services.

Another noteworthy result that came out of Ampere’s survey, is the fact that many viewers have completely switched from YouTube to Facebook for viewing videos. Ampere surveyed 10,000 consumers in Europe and North America and found that 15% have watched videos on Facebook in the past month. It further stated that among the audience which watched video on Facebook, one-sixth of them (16.67 percent) have not watched anything on YouTube in the past month.

However, Facebook still has a long way to go before it over-takes Youtube, as many advertisers still prefer Youtube due to the flexibility it provides to them for their ads which run before, during or after a video is shown.

Most importantly, ads on Facebook are shown after the video is played as opposed to the pre-roll commercials which run on Youtube before the video hence increasing the chances of viewers actually watching and engaging with the ad. This has also led to difference in the price model of both companies with Youtube charging advertisers only when complete ad is shown unlike Facebook which charges advertisers once three seconds of the video has been delivered, making Youtube a preferable and more cost-friendly choice over Facebook.

Ampere Research Director Richard Broughton said,

If the social network’s own video ambitions are to be realized, and if it is to convince content owners it is a viable alternative to YouTube, it must deliver comparable returns.

However for the time being it looks like content owners are actually taking Facebook more seriously, especially with the recent revenue-sharing deals between the social network and NFL and Fox Sports, thereby posing a serious threat to the leadership of Youtube in video market.



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