Facebook and Twitter reportedly offering YouTube stars lucrative ad revenue deals

Since the launch of Facebook Live at the start of the year, Facebook has been busy inking multi-million dollar deals with media companies, celebrities, and internet stars. The latter remain hesitant to take the plunge, however, as the social network still lacks an ad revenue model, which tends to be the main source of their income on YouTube.

In an effort to lure digital celebs, Facebook is testing a new strategy that sees it share revenue from ads shown between videos, with creators netting 55 per cent of the ad money, which is the same as on YouTube, reports Bloomberg.

“We’re going to be experimenting with a bunch of different formats for creators in the coming months,” Facebook’s head of video Fidji Simo told Bloomberg. “It’s likely not going to be a one size fits all.”

Facebook had a big presence at VidCon this year, where it reportedly sat down with some of the biggest online stars in attendance and quizzed them on payment options.

The biggest hurdle for Facebook is where to place the ads in videos. Simo claims that executives are against YouTube-style, pre-roll ads, as they may result in viewers skipping Facebook’s auto-playing videos altogether. Instead, she says the social network is considering inserting ads in the middle of long videos.

Another issue Facebook will inevitably encounter is sponsored posts, which continue to plague Instagram despite the FTC ordering users to designate these types of images as ads using hashtags, such as #ad or #sponsored. Even Instagram’s most-liked image of all time — a pic shared by Selena Gomez — is a Coca-Cola ad that does not carry the FTC hashtag labels.

Not to be left behind, Twitter is also stepping up its revenue-sharing model via its Amplify program, which will see it offer up to 70 percent of ad sales revenue to individual creators. The move may have been spurred by rumblings that Vine (which is owned by Twitter) is in danger of losing its top-tier talent due to a lack of compensation options. Two of the video-looping platform’s biggest stars, Logan Paul and King Bach, are already creating content for Facebook Live.

In April, it was revealed that Facebook was circulating a survey to selected users regarding possible monetization options. Among the ideas on the document was a “tip jar” that would allow fans to donate money to a user, sponsorship deals involving branded content, ad revenue, and a charity donation option (also swiped from YouTube). The latter was rolled out to users in July.