Three ways Facebook can beat YouTube at its own game

Facebook has already surpassed YouTube on one important metric. Here’s how it can close the gap

YouTube logo on a wall

(Kiyoshi Ota/Bloomberg/Getty)

YouTube has long been the dominant online video platform, but Facebook is quickly catching up. And it’s continuing to make great leaps, according to a study released this morning by Ampere Analysis in London.

The two platforms were essentially neck-and-neck in terms of monthly active users, with Facebook amassing 1.4 billion compared to YouTube’s 1.3 billion. Although Ampere expects YouTube video views to come in around 3 trillion this year, Facebook won’t be far behind with 2 trillion. And what’s more worrying for YouTube is that just over 15% of Facebook video viewers surveyed by Ampere in North America and Europe hadn’t watched a single YouTube video in the past month.

ampere analytics

Of course, YouTube has had 10 years to develop a sophisticated video offering for users, content creators, and advertisers, whereas Facebook’s video platform is nascent. The social network has a lot of work to do to compete with YouTube on all fronts. Here are three key areas Facebook needs to address to become an even bigger threat:

1. Revenue sharing

YouTube has been so successful in part because it’s developed a star ecosystem. The platform’s personalities have built huge fan bases, who keep coming back to YouTube. Beyond the prospect of Internet celebrity, YouTube encourages content creators to pump out more videos by allowing them to keep 55% of the ad revenue associated with their content. Facebook has no such standardized program, though it has run trials with large companies such as the NFL and Fox Sports. A way to monetize content would encourage more individuals and companies to make videos specifically for Facebook, and perhaps entice existing YouTube talent. “If Facebook were to start monetizing, we would definitely put more into it,” Harley Morenstein, one of the founders of Epic Meal Time (6.8 million subscribers), told Canadian Business in May.

2. Search

Seeing how YouTube’s owner is Google, it’s no surprise there’s a highly accurate search function on the platform. That’s not true on Facebook. Search is somewhat antithetical to Facebook’s whole approach, as it instead relies on sophisticated and mysterious algorithms to surface content for you. But that makes it difficult to, say, find a video you saw last week and watch it again. Neither content creators nor advertisers like the idea of videos disappearing in an abyss of Facebook posts after a while. Facebook will have to develop a way for users to easily retrieve videos and find the content they’re looking for.

3. Ad products

YouTube’s TrueView advertising product is generally considered a win for all parties involved. Viewers can skip the ad after 5 seconds, and brands don’t pay unless someone watches at least 30 seconds. And it’s stepped up its efforts to pair advertisers with quality content through the launch of a product called Preferred, which debuted in Canada in May. Google Canada managing director Sam Sebastian previously explained:

“We tend to over-complicate everything…YouTube is this massive sandbox that we haven’t done a very good job delivering to advertisers and agencies.” Preferred hives off the top 5% of content on YouTube for brands to run their ads against, using what it calls a “preference score” to rate content based on the number of views, shares and sentiment behind comments, among other factors, to determine what qualifies as its best material.

On Facebook, brands can pay to promote their own videos in the hope that users will share the content with friends. Indeed, the benefits of a video going viral on Facebook are potentially huge, but it’s far from a sure thing. The ability for advertisers to get placement next to or in front of popular content on Facebook is limited. There are no pre-roll ads, and Ampere predicts the company will have to introduce them at some point to entice more brands to the platform. Facebook has experimented with ads that play after videos, but it seems unlikely anyone will want to stick around for that.