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Facebook Is Catching Up To YouTube In Video Advertising Arms Race
With an estimated 2 trillion video views compared to YouTube's 3 trillion in 2015, Facebook stands to be an even stronger rival for ad dollars.
YouTube has a nearly decade-long head start over Facebook in the online video race, but the social network is catching up quickly.
According to a recent survey and market research by Ampere Analysis, Facebook is primed to rack up two thirds as many video views as Google’s network in 2015 — two trillion views compared to three trillion on YouTube. As recently as the third quarter of 2014, Facebook trailed YouTube in views by a factor of 9x.
And because of that reach and momentum in growth, Facebook stands to become a more serious contender in the battle for share in the lucrative video advertising market.
Up to now, Facebook seems to have been content with slow-playing its video advertising efforts. It doesn’t offer pre-roll ads and is only experimenting with post-roll revenue sharing partnerships with the NFL and Fox Sports. Content providers mostly are using the video platform for branding and awareness campaigns.
Even so, Facebook’s challenge to YouTube is showing strength. Based on similar totals of monthly active users on the two networks, Ampere found that advertisers value Facebook inventory at a higher rate, $0.73 per MAU for Facebook vs. $0.28 for YouTube. That’s despite the fact that Facebook charges advertisers for views as short as three seconds in its autoplay environment while YouTube only charges when people view a view for about 30 seconds.
One of Facebook’s advantages, of course, is that its viewers are logged in and therefore, the company can tap into a much richer pool of personalized data to target people.
Facebook videos are definitely finding people; Ampere’s research found that 15% of internet users across North America and Western Europe had watched a video on Facebook in the last month. And a sixth of those people had not watched a video on YouTube in that same time span.
Ampere research director Richard Broughton said he expects Facebook to eventually succumb to pressure to add more advertiser friendly formats, like pre-roll.
“As Facebook moves from testing its advertising models to more actively soliciting content creators to join the platform, it will come under increased pressure to match the opportunities and per view returns generated by other platforms – notably YouTube,” Broughton said in an emailed statement. “Ultimately, despite Facebook’s current reticence around offering pre-rolls, it may have to bite the bullet and add them to its repertoire. If the social network’s own video ambitions are to be realised, and if it is to convince content owners it is a viable alternative to YouTube, it must deliver comparable returns.”
Broughton added that the YouTube vs. Facebook competition isn’t likely to be settled soon:
“The scale of the two players is such that there is likely to be no speedy victory for one side or the other – years of competition are on the horizon. From a consumer perspective, exposure to increased volumes of advertising is almost a certainty, but improved returns for their favorite channels will mean more content to watch.”