Facebook challenges YouTube’s ad territory

SAN FRANCISCO — Facebook will begin sharing advertising revenue with companies that post videos on its social network, in a step towards luring more premium content away from sites such as Google’s YouTube.

Facebook will offer contributors 55 per cent of the revenue from ads that appear alongside videos — the same split as YouTube. The spots will be part of a new feature that suggests clips to Facebook users who are already watching videos, the company said on Wednesday. Facebook will sell the ads for the new programme, which begins later this year.

Video-viewing has exploded on Facebook in the past year, as the company has interspersed clips among the photos, status updates and other posts in users’ News Feeds.

Facebook generates more than four billion video views a day — up fourfold in just a few months, said chief executive officer Mark Zuckerberg in April.

The company, owner of the world’s largest social network, wants to persuade major media companies to post more of their videos on Facebook before anywhere else as a way to increase the ad revenue from clips.

Mr Dan Rose, a vice-president of the company, said: “These premium content makers have told us that if they had a way to make money from Facebook, then they would post a lot more.”

The Wall Street Journal reported that Facebook is still figuring out how to package and price advertising for the feature, but early reaction from marketers has been positive.

They like that their ads could potentially be included alongside the type of high-quality content they typically align themselves with on television, rather than inserting their messages, potentially out-of-context, in the News Feed, The Journal quoted a Facebook spokesman as saying.

Another big draw for advertisers is that the sound for their ads will be switched on by default, which is a welcome shift for those who have bemoaned the fact that auto-play ads on Facebook have been muted until now, the Journal reported. The initial media partners include NBA, Hearst, Fox Sports, Funny or Die and Tastemade.

Facebook also shares advertising revenue with publishers including The New York Times and BuzzFeed, which uploads videos directly to the social-media site. Such media companies have decided that the possibility of reaching Facebook’s 1.4 billion users is worth any reduction in audience for their own websites. Agencies