Will Facebook Score a Touchdown With the NFL?
The NFL and the leading social networking website operator are testing a new video offering. The pro football league will make game highlights available, and the first batch features ads from mobile giant Verizon (VZ).
The important thing about this partnership is that Facebook and the NFL are splitting the ad proceeds. This is something that could lead to some big money for both parties.
Ad It Up
There are a lot of NFL fans on Facebook. This isn't a matter of opinion: We know that nearly 12 million Facebook users "like" the professional football league. And that's just the league itself. Each of the NFL's 32 teams also has millions of fans on Facebook apiece. The Dallas Cowboys has more than 8 million Facebook users that "like" the playoff-bound team.
All of these connections are important given the viral nature of Facebook. These fans will see these clips populate their feeds, having opted in by clicking "like" on the teams' pages or listing the teams as personal interests.
The net goes out farther than that. Some of these fans will then go on to share the clips by posting them to their timelines, sharing them with their friends and families who may not be directly paired up with the NFL or the individual teams. In other words, there are plenty of ways to amplify any broadcast on Facebook, and now we have a platform that provides what should be a lucrative form of monetization.
It's the equivalent of a Trojan horse, where marketing is sneaking into the market disguised as a gift of content. It's going to work, and just wait until the NBA, rock bands, and producers of favorite shows step up to broker similar deals.
YouTube in the Crosshairs
Facebook and Google (GOOG) (GOOGL) have been butting heads a lot lately. A lot of the Web traffic and lead-generating search requests that used to come to Google are now being satisfied on Facebook.
The new NFL-backed video ads will challenge Google's YouTube. It's clear that Facebook sees video as a growth opportunity. Video ads pay more than stagnant display spots, and users crave engaging video.
But this is not the only way that Facebook is using video to compete more effectively with Google's YouTube. TechCrunch is reporting that Facebook is now giving some companies the option to choose a featured video to be displayed on top of their "videos" page. There's also the option to make playlists of their videos. This gives a company's video page on Facebook a similar look to YouTube, with thumbnails of various clips available on YouTube channels. Facebook confirmed to TechCrunch that it's testing the new format with a few pages.
We're still early in the game. There are still a lot of plays to run. However, this NFL-on-Facebook deal is a game changer, paving the way for 2015 to be the year of video monetization for Facebook. That's a score in any sport.
Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Facebook, Google (A and C shares), and Verizon Communications. The Motley Fool owns shares of Facebook and Google (A and C shares). Try any of our Foolish newsletter services free for 30 days. Build a winning team in your portfolio with The Motley Fool's one great stock to buy for 2015 and beyond.