The new "Suggested Videos" feature, which is being tested on iPhones, includes a revenue-sharing arrangement for media companies and content creators, similar to YouTube's current revenue-sharing model.
In the Suggested Video feed, the user will be offered an additional feed of video suggestions based on the clip they originally clicked on in their News Feed.Facebook plans to share 55% of the revenue generated from the ads sold along the videos with the content creators, Facebook spokeswoman Carolyn Thomas said in an email. A few initial partners to this arrangement include NBA, Hearst, Fox Sports, Tastemade and Funny or Die.
The social media giant has been a threat to YouTube since it began video advertising, but this new ad-sharing component encroaches even more, said Debra Aho Williamson, principal analyst at eMarketer. "Up until now, the only way video ads could be seen was in the middle of the News Feed," Williamson said in a telephone interview. "This new feature now brings Facebook closer to what YouTube does."
Facebook said in a recent blog post that twice as many people watch videos on the site today compared to six months ago. In an effort to keep up with this increased video traffic, Facebook has been busy making changes to its site to keep both advertisers and users satisfied.
The company announced Monday that it is changing its News Feed algorithm to further consider how a user interacts with the video, and prioritize certain videos on their feed accordingly. Also this week, Facebook sought to make video ads more attractive to marketers by lengthening the amount of time a user views an ad before the marketer is charged for it.
With this option, an advertiser is charged after a user views a video ad for 10 seconds or more, significantly longer than the current policy, Facebook spokeswoman Elisabeth Diana in a telephone interview.
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