Ads on Meta platforms like Instagram and Facebook have grown dramatically in recent years. But that could soon change — at least in Europe.
Meta announced that starting this month, it will offer people living in the European Union, the European Economic Area, and Switzerland the chance to pay for a monthly subscription that eliminates the ads that usually clutter user feeds. In addition to ad-free scrolling, users on the ad-free subscription will scroll without behavioral tracking, relieving privacy concerns that have plagued Facebook for years — at least for European users.
Indeed, according to Meta, the decision to offer an ad-free subscription is about compliance with changing European regulations. It will still earn the company cash, though — Meta charges €9.99/month (Web) or €12.99/month (iOS and Android) for access to the ad-free versions of the platforms. Meta says the subscription will initially cover all linked accounts in a user’s Account Center.
However, the cost will increase by an additional €6/month for each additional account from March 1, 2024.
Meta Goes Ad-Free: Why?
According to the company’s official statement, Meta believes in one supported by ads internet environment. It’s no secret why. Some 97% of Meta revenue comes from ads. In fact, it is reported that the ad revenue for the second quarter of 2023 single it was $31.5 billion. At the same time, ad impressions increased by almost 35% in 2022.
It’s safe to say that Meta would still be focused solely on ad-free subscriptions if it weren’t for the growing pressure and regulations in the European region. Because “consent” is an important part of data sharing, the Court of Justice of the European Union agreed that a paid subscription model will serve as a valid form of consent for users. Deciding that is not paying for ad-free usage means you consent to sharing data and serving ads.
In short: offering an ad-free subscription helps Meta maneuver around strict European regulations while still making a significant amount of money from subscription fees. Ethically questionable? Sure. But technically, a paid model meets the requirements.
Furthermore, is there a significant audience that can part with their hard-earned dollars for what could be considered a better user experience? Of course, not seeing ads and not being part of the data used to create them is another thing, too. Certainly, the revenue per user for this model should be better than the revenue per user with ads.
Meta Goes Ad-Free: A New Trend?
While the announcement may come as a surprise to some, Meta isn’t the only social media platform to announce a potential ad-free user experience. For years, streaming services like Spotify have provided users with uninterrupted services. Just last month, TikTok also announced would try a similar paid/ad-free subscription in Europe. Although at $4.99, its subscription model is arguably cheaper. X and Snapchat already offer subscription-based services, though they vary.
X Premium level subscribers see about 50% fewer ads, while Premium+ users see none in the For You and Following timelines. Snapchat similarly offers one ad-free option, but limited to certain parts of the app (Story and Lens only). And, YouTube has also jumped on the ad-free bandwagon YouTube Premium—a service that lets users skip annoying ads for about $14/month.
What we can take away from this shift is twofold: Privacy regulations are making it increasingly difficult for companies like Meta and X to serve ads—and collect user data—the way they used to. This is a good thing.
Many users I have expressed disappointment with the increasing number of ads and sponsored content on social networks, this can make it difficult to find the content that users really want to see. Instead of a personal experience, it becomes a curated experience—one that social media platforms curate to ensure users see ads they’re more likely to like. The worst, the Federal Trade Commission announced an increase in the number of people complaining they lost money buying items they saw on social media ads.
The point is: monetized ads for Meta and other platforms aren’t necessarily vetted to make sure they’re legit. In that sense, paying a few dollars a month for ad-free content can save users money in the long run — if they were actually spending money, wouldn’t they have gone ahead and spent it anyway?
Meta Goes Ad-Free: When Can US Users Benefit?
So far, no plans have been announced for an ad-free user experience for US users. However, the move to subscription-based ad-free options raises a few questions. For example, how many fees and how many subscriptions are too many? For example, After and X both allow verified paid user status.
Users on YouTube also have the ability to pay for TV subscriptions. It is possible that users can pay for multiple subscriptions to same application. The question remains: are they willing? Furthermore, would Meta want to offer this in a market where privacy is much less strict and users are a rich target environment for ad data and ad revenue?
The situation appears to be similar to the streaming proliferation many are experiencing with apps like Netflix, Hulu, Apple+, and other services. At first, streaming was marketed as an affordable alternative to cable TV.
Now, it’s become so fragmented that many users pay more for streaming than they ever did for cable. Membership fatigue it’s real. In this case, what’s even more important is that users are forced to pay for companies not to record their personal information — information that makes these companies money.
At least for social media companies, it’s a brilliant model. They want to make money, one way or another. Users on the other hand…did it really ever matter?