Is Facebook the new YouTube?

Retailers and brands are taking note as the world’s largest social network evolves into a platform where they can use videos to market their products.

With 1.441 billion monthly active users, Facebook Inc. is the largest online social network in the world. And it could soon surpass Google Inc.-owned YouTube as the primary platform where consumers view videos, according to a new report by U.K.-based consultancy Ampere Analysis.

Retailers and brands have taken note as Facebook bolsters its video ad units and businesses are increasingly turning to the social network to market their products via online videos, the report says.

The result is a new advertising “arms race,” according to Ampere, which notes that Facebook gives marketers a chance to reach consumers who might not see its ads on YouTube. That’s because roughly one-sixth of Facebook video viewers in May did not watch videos on YouTube in the past month, according to Ampere’s survey of more than 10,000 European and North American consumers.

One sign that marketers are taking notice of Facebook’s evolution into a videocentric platform is HBO this week offering free access on Facebook to the debut episodes of its series “Ballers” and “The Brink.” The episodes are not available on YouTube or other non-HBO digital platforms.

Facebook’s video ads are particularly attractive to marketers because the social network’s users are logged in, which means it often has more data about its user base than YouTube and its parent Google offers them. Marketers can use the Facebook information to target particular consumer segments, such as men between the ages of 18-25 who are interested in tennis who are in a brand’s email database (Google enables marketers to target consumers on YouTube based on their demographics, location and language, as well as by their apparent interests based on the videos they’ve viewed or if they have visited the retailer’s site or YouTube page).

That’s despite Facebook charging advertisers once three seconds of video have been delivered, which is far less marketer-friendly than YouTube, which only charges when the ad runs for its full duration or when the consumer engages with it.

While Facebook’s newfound video advertising strength is providing a new revenue channel, many marketers will continue to use YouTube, says Richard Broughton, Ampere’s research director.

“The scale of the two players is such that there is likely to be no speedy victory for one side or the other—years of competition are on the horizon,” he says. But as more marketers find video ads to be effective, it will likely result in more video ads on the platforms. 

Is Facebook the new YouTube?