Here's another reason Google should be afraid of Facebook: ads on Facebook are 6 times more expensive than YouTube
The announcements at Facebook's annual F8 developers' conference just highlighted that: The social network launched embeddable videos and enhanced LiveRail capabilities that will compete with YouTube and Google's DoubleClick for publishers business. As my colleague Jay Yarow said on Wednesday: "Google should be terrified right now."
And there's already evidence that Facebook's assault is starting to hurt Google.
Data from TubeMogul, compiled by Bloomberg Intelligence, shows that Facebook ads are six times more expensive than those on YouTube.
Pre-roll ads on YouTube cost 3 cents a minute and skippable ads are 12 cents.
Meanwhile, "social" ads (which is basically just Facebook) cost 18 cents.
We asked Bloomberg's head of media research Paul Sweeney to explain the reason for the pricing discrepancy: "Facebook ads are priced at a premium to YouTube because they are better targeted. Advertisers can target their Facebook news feed ads on users that meet their target profile. Facebook is able to charge a premium for this target ability."
However, volume also plays a factor, TubeMogul's VP of research Taylor Schreiner tells us. TubeMogul supplies far more YouTube inventory than inventory from social, so that drives down prices. But volume is a good thing generally, as long as the price doesn't bottom-out.
The cost metric is also per-minute viewed, not the traditional CPM (cost-per-1,000 views) so as people skip ads, it reduces the total number of minutes viewed and drives that particular price up.
However, the volume factor might be about to change. Facebook has also increased its lead in terms of video views versus YouTube, according to comScore (although these are desktop-only stats.)
A combination of Facebook changing its algorithm to reward videos in the news feed and its acquisition of LiveRail meant Facebook generated 13.5 billion views in January versus YouTube's 12.5 billion. The average Facebook user watched 107 videos a month, compared with Google/YouTube's 76.
It's worth bearing in mind that Facebook and YouTube serve two different roles: Facebook acts as a discovery platform, while YouTube acts as a vast repository of content. But Facebook's recent moves suggest that its video role might change.
And despite the massive library of content on Google's YouTube service, Facebook was able to claim more videos with more than 1 million views in the last 30 days, according to data from Tubular Labs charted for us by BI Intelligence. What makes that more impressive is that YouTube's search functionality is far ahead of Facebook's, and YouTube also offers fewer restrictions and more opportunities for content makers to make money through ads.
