Does Facebook’s Massive Video Growth Pose A Threat To YouTube’s Ad Dollars?

Facebook CEO Mark Zuckerberg has announced that Facebook is now serving more than 4 billion video views per day on the social network. This impressive number represents an increase of 1 billion from January, and clearly illustrates the massive leaps that the social media giant is making in the world of video.

YouTube is often described as the king of online video, and the company is now celebrating its 10th anniversary. Considering Facebook’s major growth, a big question for digital marketers is how the social media giant compares to YouTube as a video advertising platform.

Does Facebook pose a threat to the king of video?

Although Facebook’s video business has certainly grown massively in recent times, many advertisers still feel that YouTube’s actual ad inventory is superior. For one, YouTube features pre-roll ads, which Facebook does not include. Additionally, YouTube has a more developed video ad business overall, at least at this point.

“The growth of video views on Facebook is staggering,” said Adam Schlacter, chief investment officer at marketing and technology company Digitas. “But it’s still not 100 percent clear what the opportunities are to capitalize on that.”

However, with the massive growth that Facebook has experienced in video, and with no signs of slowing down, there are others in the digital marketing industry who feel that YouTube has reason to be concerned about holding its place as the primary online platform for video.

Facebook recently held a presentation for advertisers in New York, where the company shared details on Anthology, the social media platform’s branded video content initiative. It included presentations from companies such as Vice, Tastemade and Funny or Die. This was carefully timed, happening just a few days before the kickoff of the NewFronts, which are anchored by YouTube, and a few weeks before the major broadcast networks present their schedules for the coming season. Certainly, they are all competing for the marketing budgets of major advertisers.

Although Facebook got in front of advertisers first, some digital marketing experts still don’t see the company as posing a major threat to YouTube. “I don’t think what [Facebook] is doing throws a wrench in anything YouTube is doing,” said John Swift, Omnicom Media Group’s chief executive of North American investment.

YouTube has made great advancements over the past few years in catering to advertisers’ demands for more TV-like data and buying options, and has also focused its efforts on marketing its biggest stars.

Video analytics company Visible Measures conducted studies to compare the power of video advertisements on YouTube and Facebook. The firm looked at 82 Web video campaigns that were released in March that in aggregate reached 437.5 million people through a combination of paid advertising and organic sharing. The analysis concluded that more than half of those campaigns used Facebook. Across all of the campaigns that were released in March, Visible Measures found that Facebook accounted for 35 percent of total viewership, versus 65 percent for YouTube. At the end of last year, Facebook’s share was only in the single digits. Clearly, its growth is massive.

“There is a huge opportunity for Facebook to grab video ad dollars because of its targeting,” said Brian Shin, Visible Measures’ chief executive. “But we don’t see those dollars coming from YouTube.”

Regardless, there’s no question that Facebook is building a powerful video presence. The company’s social graph can be seen as a significant advantage over YouTube. Since videos go straight to the users in their News Feed, where they’re already spending the majority of their time on the service, they do not have to leave Facebook’s “walled garden” to find content. Google Plus, which is deeply integrated into YouTube, doesn’t have that kind of reach. Users aren’t sitting on Google Plus refreshing their feeds to find out what their friends are doing. However, many people do this on Facebook, which provides a great advantage for the social media giant.

Facebook’s Anthology-branded partnership deals provide an effective method for the company to learn what its users like in terms of video, alongside content creators and video marketers. According to several executives in attendance at Facebook’s recent New York presentation, the social media company and its Anthology partners talked about methods to use Facebook’s rich data set to inform what sort of programming gets developed through these deals.

“Facebook’s focus on real identity allows for creative development [and] personalization at scale,” said Steven Kydd, co-founder of Tastemade, one of the Anthology network partners.

It’s very interesting to analyze the differences between the two platforms, and there are a variety of opinions among digital marketers about the comparative value of Facebook and YouTube.

Do you think that Facebook will gain significant video ad dollars from YouTube in the coming period? Where are you spending your video advertising dollars?