On its way to dominate the Web, Facebook has to Invest in video


By Iddo Shai

While Facebook seems to have overcome the mobile challenge with more than half of its Q4 revenue coming from phones and tablets, some difficulties still exist. The most concerning is teens abandoning the platform in droves according to digital consultancy iStrategy Labs. In January, the consultancy released data showing that Teens (aged 13-17) on Facebook have declined by 25.3% over the last 3 years. These teens are still out there on the web, but they are becoming more engaged with services like vine, snapchat and YouTube.

So where does Facebook go from here?

All the signs point to Facebook going head to head with YouTube. Just like the big three – Apple (iTunes), Amazon (Amazon Prime) and Google (YouTube, Google Play) – realised that video is vital to their core business, Facebook will soon become much more video-centric too.

After adding video capabilities to its images app, Instagram, Facebook has recently introduced auto-play for native videos for most iOS and Android users across the globe, signalling the start of a major video push for the company.

On mobile devices, auto-play means that videos uploaded to Facebook and ones shared from Instagram play in-line while you scroll, but with no sound. There is also the option to click on the thumbnail to get a short preview of the video before making a decision to watch it in full. Choosing a provocative thumbnail as click-bait helps to ensure that friends will watch the video and “like” it.

In December, Facebook announced a further foray in to video by introducing video advertisements that play automatically within news feeds – similar to the auto-play functionality in Instagram. While the jury is out on how users will respond to this move, having a strong analytics system that enables more targeted ads will help to keep users on side.

Facebook is clearly gunning for YouTube’s advertising dollars ($5.6 billion in 2013) and has been telling advertisers that it is better positioned to deliver eyeballs on mobile and to increase traditional TV ratings using second-screen experiences than its rival. It is unclear how much Facebook will charge advertisers, but Morgan Stanley predicted last August that it could earn around $1bn (£613m) from video ads this year, rising to as much as $6.5bn by 2020.

With Twitter trying to achieve similar recognition as the ultimate TV-viewing social tool, 2014 looks set to be a very interesting year for Facebook and the social video landscape in general.


About the author

Iddo Shai is director, product marketing at online video platform Kaltura.


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