Facebook’s Killing YouTube Video Advertising

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Facebook’s Killing YouTube Video Advertising

Facebook’s Killing YouTube Video Advertising

The rise and growth of online video content over recent years does not show any signs of slowing. Experts say that video will represent 69% of all consumer-based internet traffic by the end of next year. This is expected to rise to 80% by 2019; and Facebook’s stealing ad revenues in this market right from under YouTube’s nose!

This trend will certainly have an impact on the advertising industry. Looking at the following stats, it’s clear that video will continue to be a critical element of successful digital marketing strategies for the foreseeable future. Video is, in fact, the fastest-growing advertising category on mobile, desktop. and overall from 2016 through to 2020.

  • Every minute, 48 hours of video gets uploaded to YouTube
  • By 2018, 69% of total Internet traffic will be video
  • From 2012 to 2014, mobile video views increased by 400%
  • 45% of mobile videos viewed were less than 6 minutes
  • The average click-through-rate (CTR) on video ads is 1.84%, the highest CTR of all digital ad formats

Over the past few years, videos have lived exclusively in the land of YouTube. Since last year, though, something has changed: Facebook has shown that it can be a major player in the market. The “ice bucket challenge” had over 17 million video shares in just a matter of months. Exactly one year ago, November 2015 was the first month where more videos were uploaded to Facebook than posts containing links to YouTube.

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What’s the difference between video advertising on YouTube and Facebook?

YouTube advertising is mostly done through video campaigns on Google AdWords. The format is called TrueView, and can be used to target certain channels or topics instead of targeting specific keywords. Advertisers can even remarket with video, meaning ads can be targeted to users based on their previous interactions with a specific video.

Facebook v YouTube video ads

On Facebook, advertisers can either create a video in-house, or use an existing video to upload to Facebook’s native video player. From there, it’s possible to customise the video description, thumbnail, budget, and audience to serve the ad to.

YouTube charges per view. A YouTube “view” is charged after 30 seconds (or the full duration of the video, if it’s shorter than 30 seconds), or when a user engages with the video.

On Facebook, videos ads can be shown in the news feed for users, and they auto-play as the user scrolls down. Facebook charges by cost per 1,000 impressions (CPM) equivalent – though advertisers can bid on a cost per view (CPV) basis – and a “view” is counted after just 3 seconds.

Which platform is better for advertisers?

First, it’s not easy to compare the two platforms, because of different targeting audiences, cost, and ad formats. We’ve run numerous video advertising campaigns for our clients on both platforms, and have found that Facebook achieves better results at a much lower cost.

For instance, video campaigns we ran simultaneously on both Facebook and YouTube in the past 3 months had shared KPIs (Key Performance Indicators) of website clicks and video views. Normalising results for a similar budget, and the same time frame, here are the main findings:

  • Facebook campaign got almost 17% more link clicks more than YouTube
  • On Facebook, impressions are almost twice as many on YouTube
  • The average cost-per-click is 4 times more expensive on YouTube (£1.07 vs £0.25)
  • The average cost-per-view on Facebook is 10 times lower than on YouTube (£0.004 vs £0.03)

Facebook Wins

In general terms, Facebook seems to be the way to go, especially in terms of number of impressions and cost. YouTube may be a better advertising option if we consider quality watched time, while Facebook is the right choice to reach broader audiences at a lower cost.

When promoting a video on Facebook, you could get 3 times more impressions for your budget. However, since auto-play could be activated on users’ devices, every impression could potentially count as at least 1 or 2 seconds for Facebook’s overall watched time count.

AdWords Causes YouTube’s Downfall

The greatest obstacles to improve performance on YouTube come from inherent shortcomings in the AdWords system.

  1. CPCs can’t fall below 1p: The minimum cost per view for a TrueView ad cannot go below £0.01. A popular video on Facebook can easily enjoy CPVs as low as 1/10th of 1p (£0.001), and this doesn’t even include the organic views and shares generated on the network
  2. Demographic data is scarce: While users can login on Google / YouTube when consuming video, a huge percentage of video consumption on the site is not by signed in users. On a typical campaign, 30% of the impressions delivered on YouTube come from users whose demographics are unknown. If mobile is excluded from the campaign, the percentage rises to well over half of video views and impressions
  3. Interest targeting isn’t perfect: While browsing data on the Google Display Network isn’t to be laughed at, it isn’t quite as rock-solid an indicator of user interest as the information they share and pages / posts they follow on Facebook
  4. Ad formats are limited: While YouTube has been known on occasion to break the mould and afford advertisers with 6-figure budgets to get very creative, most regular advertisers are quite severely limited in their ad options and presentation of calls to action alongside their ads. Facebook, on the other hand, allows the use of video combined with a range of creative, text and call-to-action options

If Google intends to take on Facebook and bring YouTube back to the top of the video advertising market, they have their work cut out for them.