Mark Zuckerberg has been trying for years to direct YouTube advertising budgets to his own platform. It started with the promotion of video content, live streaming and most recently Facebook Watch. Success has failed to materialize for the Facebook video strategy. One reason: the effort is too great, the profit too small.
In the first quarter of 2018, Facebook made a profit of almost $5 billion. More than 95 percent of their income comes from the social network’s advertising business.
According to Mark Zuckerberg, this value will continue to rise in the next few years. Video content and its monetization through classic mid-roll advertising formats is expected to be a major driver.
For several years now, Facebook has been trying to make it clear to its users, publishers and advertisers that there is no way around movie content. This kind of content gets more interactions and is preferred by the algorithm over classic links or image posts.
The message: if you don’t follow the Facebook video strategy, you won’t see any significant profits – in the form of money, clicks or interactions – in the long run.
The Facebook video strategy: a lot of effort, hardly any profit
The goal of Mark Zuckerberg’s Facebook video strategy is obvious. He wants to get publishers and influencers to publish their content on Facebook instead of YouTube. The professional Facebook video content will then attract advertisers who redistribute their budgets from YouTube to Facebook.
The problem with this plan was discovered by Sahil Patel, journalist at Digiday. He has talked to the leading Facebook video producers in the USA. The realization: revenues from interruption advertising in the middle of Facebook videos are rising sharply compared to the previous year. There is talk of sales leaps of up to 40 percent.
However, the level of revenue is low compared to YouTube. One of the top video publishers revealed that he receives $264 for one million video views on Facebook. On YouTube, he gets $2,200 US dollars. That’s almost ten times more.
Another problem: while YouTube’s success and revenues are reasonably predictable, a Facebook video’s success also depends a lot on happiness, interactions and distribution. Reliable planning is currently not yet possible.
The last big problem from the point of view of a (German) publisher is that in the above mentioned cases we are talking about millions of Facebook views. Even if video content would be worthwhile with this many views, this does not make for a new business model for fanpage operators, who may generate a few tens of thousands of hits per month.
So it may be a few months or maybe even years before Facebook becomes a serious competitor to YouTube.