What Facebook’s YouTube-style ad revenue split means for video marketers

Facebook is finally introducing a way for video creators to earn ad revenue, adopting YouTube’s revenue sharing percentage in a move that smart marketers could look to exploit by testing the platforms contrasting user behaviours in parallel.

When a Facebook user goes to watch a video later this year they will be taken to a Suggested Video feed that show recommendations with branded videos wedged between them, much like TV ads. Similar to YouTube, Facebook will keep 45 per cent of the revenue these videos make and give the rest to their creator.

According to Variety, the amount of time people watch the video will factor into the size of the pot that’s split. It is not yet clear whether this means people will have to watch the full ad to ensure advertisers receive the maximum money.

While a test (for now), the move could close the gap on Google and ultimately give brands more opportunities and flexibility in activating video based content campaigns. However, is it also the catalyst for a game changing innovation from YouTube. Rather than be backed into one camp just yet, smart marketers will start testing Facebook and YouTube video in parallel and either optimise investment levels live to the better performing platform or make a final strategic decision between the two as a central part of their post campaigns analysis.

Daily videos on Facebeook went from one billion in September to four billion in April and eMarketer estimates that US adults will spend 6.4 per cent of their time per day there. And yet consuming video on Facebook is still arguably a passive behaviour with people not necessarily having watched a post because it appeared in their feed. For YouTube, it’s an active process because people normally visit and search for specific content.

Paolo Nieddu, managing partner of content at AnalogFolk London, said the more “astute brands and agencies” will consider the contrasting ’Seek (YouTube) versus Serve (Facebook)’ user behaviours on the two platforms and how they can “actually be harnessed to complement each other as part of the same campaign”.

“If executed correctly Facebook could act as a mass reach and /or laser targeted discovery tactic to drive awareness of long-form content campaigns on YouTube for example,” he continued. “In addition, let’s not forget the usage behaviours that straddle the real world too. We’ve all been in the ‘I’ve got to show you this video’ moment in the pub with friends. The natural inclination is to search for said video on your smartphone via YouTube, an inherent behaviour I don’t believe Facebook will be able to affect (yet).”

It remains to be seen whether Facebook’s Suggested Videos will be profitable for its early adopters like the NBA and Fox Sports. In a worst case scenario those advertisers will get further branding for themselves and best case they will get more money as daily video views grow.

If the potential for making money isn’t as good as YouTube, then Facebook may not be able to take YouTube as the dominant video platform. By adopting YouTube’s revenue split from the outset, Facebook isn’t just assuming that marketers are going to switch in their droves because of its mass reach and realises it needs to offer decent return on investment or the switch from YouTube will stutter.

Jed Hallam, head of digital strategy at Mindshare said: “The battle for video viewing is certainly heating up, with Twitter announcing better viewability standards, YouTube/Google denouncing its competitors, and now Facebook offering revshare with original content creators. From a Facebook perspective, this is another brick in the wall of its burgeoning media empire, as it begins to cement itself as a destination for original content (‘Facebook-first’ native publishing deals with a number of high profile publishers). From a media perspective we’ll be watching this closely, as ever, the formats might be exciting, and the concept might be interesting, but we’ll need to see consumers thinking that way too.”

Facebook has turned up the heat in its battle for video budgets with Google. For advertisers, it is a chance to gain valuable insight into the next stage of video monetisation on both platforms as they try to understand how best to plan their media buys.

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