Can Faceook chal­lenge Youtube in video arena?

The ‘so­cial net­work’ looks to de­throne Google with new ad sys­tem, IQ re­search. Will it work?

Campaign Middle East - - FRONT PAGE -

It’s of­fi­cial: Face­book has de­clared war on YouTube, aim­ing its guns firmly at ad­ver­tis­ing’s fastest-grow­ing seg­ment: dig­i­tal video.

Google’s YouTube is part of the fur­ni­ture of the in­ter­net and, for many, it sim­ply is on­line video. Its shadow over the dig­i­tal ad mar­ket looms large, com­mand­ing a 31.8 per cent share of the mar­ket, data from eMar­keter sug­gests. By com­par­i­son, Face­book snatches just a 5.8 per cent share.

Ac­cord­ing to eMar­keter, YouTube is on track to gen­er­ate $7.2 bil­lion from global ad­ver­tis­ing in 2014. How­ever, its switch to­wards qual­ity con­tent to at­tract more ad­ver­tis­ing has come at a price. Traf­fic and con­tent ac­qui­si­tion costs are be­lieved to re­sult in net ad rev­enues closer to $3.2 bil­lion – around half of the to­tal ad-spend di­rected at Face­book ($7.87 bil­lion).

The bat­tle will play out on two fronts. First, Face­book has a new way to serve ads, At­las, that uses its data to run non-Face­book cam­paigns Om­ni­com has al­ready trans­ferred its buy­ing sys­tems to At­las.

Sec­ond, Face­book be­lieves it truly un­der­stands mill-en­nial at­ti­tudes through its IQ re­search, and this means video. The re­cent ac­qui­si­tion of the video ad net­work LiveRail will pre­sum­ably give the so­cial gi­ant the abil­ity to serve video ads through At­las. Mean­while, Google’s new video ad for­mat weaves its fa­mous al­go­rithm into YouTube to make sales more ro­bust and re­li­able. In the US, Google Pre­ferred has run since April, and fourth-quar­ter ad book­ings are re­ported to have al­ready sold out. Google Pre­ferred launched in the UK last week. How­ever, in terms of user num­bers, comS­core’s re­cent US fig­ures showed Face­book com­ing in ahead of YouTube by one mil­lion views.

Add to the mix new anal­y­sis from So­cial­bak­ers that found Face­book is clos­ing the gap on YouTube as a video distrib­u­tor. Draw­ing on more than 180,000 Face­book video posts across 20,000 pages, So­cial­bak­ers forecasts Face­book will sur­pass YouTube in terms of share of video in­ter­ac­tions for the first time by the end of the year.

With on­line video tipped to re­main the fastest-grow­ing part of the ad mar­ket in the next few years, there is much to play for.

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