In November 2023 Meta launched a new ad-free subscription model for the European Union, Norway, Iceland, Lichtenstein, and Switzerland. For €9.99 (desktop) or €12.99 (mobile), users can now pay for their data to be kept private. The new policy comes in response to Meta ongoing battle with European privacy laws. A series of fines and legal cases have caused Meta to act, but the consequence of such action is controversial. For the past two decades, Meta has told users that everyone should receive the same product and service regardless of income. And now, for the first time in its history, Meta has placed a price on privacy. The subscription option will only be available to adults, while the company’s platforms will pause ads for people under 18.
Are subscription models the future of social media?
TikTok confirmed it’s testing an ad-free subscription tier for €4.63 a month. Last year, Snapchat rolled out Snap+, a €3.70 subscription that offers an ad-free plan. This is nothing new for YouTube, as the video giant has been offering a €12.99 a month ad-free subscription service since 2015. Following Elon Musk’s takeover of X (formerly Twitter), the platform has been pushing subscriptions, even offering a 50% reduced ad load for those willing to shell out €16 per month for its premium subscription service. On the flipside, streaming services like Netflix and Disney + seem to be travelling in the opposite direction, moving from an ad-free subscription model to one with advertising opportunities, following in the footsteps of Now TV and Hulu.
What this means for marketers?
Whilst Meta’s new model will open an alternative stream of revenue for the platforms, it might have lasting damage for small businesses and startups who rely heavily on using target ads on social media to reach their audience and raise awareness of their brands. It’s unlikely that we will see marketing budgets move away from social because it still remains integral for awareness building. But what’s likely to happen is the focus might shift away slightly from targeted ads to other formats.
Influencer marketing set to rise
Influencer marketing budgets have been steadily growing year on year, but industry experts predict that an add-free service will likely add fuel to the fire. As users start paying to receive less targeted ads, companies are likely to invest more in their strategic partnerships with influencers to reach their audiences effectively. The stage is set for the creator economy to become even more influential.
Organic presence more valuable than ever
An add-free marketplace reinforces the need for brands to invest in their organic presence on social media. Advertisers who don’t build a strong organic presence already struggle with long-term awareness-building as it is. Without ads, they stand no chance. The new model only reinforces the value of brands being authentically engaged with their target audience on social media.
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