ALEX DEBELOV: When I initially started the company, I wanted to create an easy way for anyone to promote a video online. What we’ve done since then is build partnerships with publishers across a variety of premium sites, blogs, Facebook, and allow people to promote video on the web.
YouTube predominantly has been the platform of choice for some time where people wanted to upload and host their videos because of its community, but a lot of publishers want to distribute their own content or there are other players like Facebook who can host their videos now.
We’ve started to see the Facebook video player being a much more dominant player in the market over the last year and a half. This isn’t surprising to brand marketers, but in the news feed itself, Facebook will show its player four or five times more often than the YouTube player.
What are the metrics indicating?
A lot of the traffic that YouTube receives today is referral traffic from Facebook, Twitter, blogs, and from the user perspective, I don’t personally go to YouTube and try to find videos. Usually friends send the video to me or I see it in my Facebook news feed or through a link on Twitter. YouTube has become very much dependent on this referral traffic. What Facebook has realized is to create a very good video product, you have to have really good infrastructure.
Facebook realized a lot of their users spent time engaging in video content on their website. When you have good content, it helps metrics like time spent on site per user. And once people watch videos, they spend more time overall and it’s become a very crucial part of their product. It made sense that they would come out with their own product rather than be dependent on a third party like YouTube.
How has Facebook’s role as a funnel for YouTube traffic changed?
A year ago, the number of Facebook shares to YouTube was a very key indicator of viral success. For every person who watched a video, what percentage went out and shared, it would determine how viral the video would become and that, in turn, would determine how often it’d show up in the news feed. We saw in our own efforts at Virool that we would get about 38 additional views per share through [YouTube referrals] and now that’s dropped quite significantly to about 10 additional views.
But Facebook’s video player is performing really well. Clients are making a conscious choice to upload a video to Facebook vs. YouTube and the reason is they see 10x more engagement with the Facebook player.
Is this why we’re seeing mega-publishers like the NFL test sponsored videos in the news feed? And even though the NFL has a new YouTube channel, they still seem hesitant to go whole-hog on the platform.
One of the bigger advantages we’ve seen with brands is their users are already logged in to Facebook, so to like or share something is very easy. You press a button and it’s done. If you’re watching a video on YouTube and you want to share it with friends, it’s kind of a multistep process. Facebook is a much better platform for that kind of engagement – for every person they reach, they will probably get much more incremental engagement. It’s kind of a tricky situation because they both count views slightly different.
Facebook autoplays the video and they’ll count it as a view after three seconds. [With] YouTube, you have to click play and watch it for longer than 10 seconds. When someone watches a video on YouTube, that counts as one view. But on Facebook if the same person watches the video twice, that will count as two views. So a view is not quantified the same on Facebook vs. Google. Two hundred views on YouTube would actually qualify as many more views than Facebook because Google has much stricter requirements around what constitutes a view.
Twitter’s also developing a native player and direct messaging video.
Twitter’s a slightly different platform. A lot of the clients we cater to have longer-form content and use videos to create an emotional connection with customers. I’d say the average length
Are you an ad network?
We’re a distribution platform for brands and publishers. Virool can tell you how many people you reached in your video campaigns and where you reached them. We created our own distribution platform because companies wanted to upload longer-form content. The industry is demanding more transparency into pricing. The model of trying to mark up media may not be going away but it’s less and less competitive. The companies who will win will give you a software platform model rather than a media model where they mark up for every impression.
Companies that followed that [ad network] model were successful up front, but once there was more competition in the space, it not only drove prices down but there is a big shift toward transparency and a lot of networks work with customers and say they’ll reach a million people and when a customer asks where their video is shown, it’s [all] long-tail. The client realizes that there are multiple stakeholders on the demand and supply side, and there ends up being a big mark up on the cost to actually reach a customer and they aren’t very transparent about actual costs.
How do you get paid?
We have a SaaS platform with a licensing fee and a cost-per-view model, which varies case-by-case by campaign.
What percent is managed vs. self-serve?
Our self-serve platform is 80% of our business and 20% is managed, used by agencies and big brands, with a dedicated team for those clients.