Would you pay to browse without ads and for greater privacy? That is the question that the Macedonia of new regulations and business movements on the big social media platforms invites us to answer lately. And the answer seems to be mostly no.
The pioneer in this was the new Twitter/X by Elon Musk, who, under the banner of freedom of expression and independence, raised the price of Twitter Blue. First, with the option to reduce ads. Then, with a more expensive option of 168 euros per year, to eliminate them completely.
Meta was forced to follow in his footsteps in Europe. And we say that she was forced by the siege of rulings, GDPR reviews and the implementation of the new Digital Markets Law of the European Union.
In the end, the owner of Facebook and Instagram, launched a subscription model for 9.99 euros per month only for community countries (119.88 euros per year). In exchange, he proposed not showing them ads or taking their data to carry out segmented advertising.
By the way, TikTok also did a small test with a price of $4.99 per month, just like Snapchat. That remained an attempt.
Expanding the focus to the media, that have opted in recent years for subscription models, we found another case in Spain. Recently, a correction to data protection regulations meant that overnight hundreds of websites offered in their cookie banners the possibility of paying to avoid segmented advertising. The summary, for many, meant paying for privacy, and it does not seem to be proving very successful.
An Instagram without ads would not be sustainable: Meta’s solution is to charge you more than it loses just in case
The large platforms have covered their backs in case these models were very successful among users. The prices for the ad-free option imposed on Meta in the EU are almost twice as expensive as what it generates for each user who sees ads. A sign that he does not want to consider that option even remotely.
In concrete numbers, Meta’s ARPU (revenue per user) on its social platforms in Europe in 2023 was 64 euros on average. That is much less than the almost 120 euros it asks for per year to browse without ads.
The data of the old Twitter is difficult to know after becoming a private company in the hands of Elon Musk. For information that has been released on a recurring basis The Information They place the number of paying users at around 600,000. Of course: without separating those who pay for the basic option that limits ads to half of those who pay for the Premium+ version to eliminate them completely.
From Hypertextual We have contacted Meta and ContentPass, a German company that manages payments for not accepting cookies on more than 400 portals in Spain, without receiving a response when we asked for figures on the number of users who have activated the ad-free options.
But how many subscribers would it take to replace Meta’s revenue in the EU?
Thanks to Meta’s detailed quarterly and annual reports, it’s easy to understand both how much Meta currently earns from advertising, and how many Europeans would have to subscribe to Meta’s services to replace that advertising revenue.
Instagram and Facebook show that it is a utopia both in income and acceptance
Meta has averaged 408 million monthly users over the last 4 quarters. Each user generated an average of $63.97 per advertisement. With these rates, Meta would need just over 200 million European users paying a subscription to replace all advertising revenue.
To get an idea, we know from the new European regulation that Facebook and Instagram have just over 500 million users. Come on, what 2 out of 5 network users in Europe should pay.
Neither Meta has the bills nor the users seem to be willing to pay for privacy. The other side is the advertisers. It seems that for them there is no end of a way to connect with consumers, clients and users.
Advertising continues to be the big business of the internet
Despite his attempts to create the metaverse and augmented reality, Meta’s business model focuses on offering targeted advertising based on its users’ data. A framework that allows advertisers to reach specific market segments with astonishing precision.
This not only increases the efficiency of advertising campaigns but also improves user experience by displaying more relevant ads. Meta, in fact, estimates that each of the euros invested in its advertising system generates 3.37, and has published statements on its advertiser panels about the new limitations.
However, its model has taken serious hits. The growing concern about privacy (or perhaps not so much) and the implementation of stricter regulations; such as the General Data Protection Regulation (GDPR) in Europe and Apple’s privacy updates on iOS, have impacted the way companies like Meta collect and use user information for targeted advertising.
Meta reinforced this in its statement announcing these measures a few months ago:
We believe in an Internet supported by advertising and that gives people access to personalized products and services, regardless of their economic situation. It also allows small businesses to reach potential customers, grow their businesses and create new markets, driving the growth of the European economy. And like other companies, we will continue to advocate for an ad-supported Internet, including with our new subscription offering in the EU, EEA and Switzerland. But we respect the spirit and purpose of these evolving European regulations and are committed to complying with them.
We will continue to invest in creating new tools that preserve the value that both people and businesses get from personalized advertising, while allowing users to control their advertising experience on our platforms.
Goal
The memory of Ello and WT Social
There are many who have tried to create a social network without ads in vain. Wikipedia founder Jimmy Wales tried it without much success with WT Social.
With a little longer duration, but also already closed, we find Ello. Launched in 2014, it was promoted as an ad-free space, focused on user privacy and a more authentic, high-quality experience in online social interactions. Ello presented itself as an “anti-Facebook” social network. At a time when concerns about data privacy and the ubiquity of advertising on social media were growing among users.
Its business model was based on the idea of not selling user data to advertisers or third parties, and it promised not to show ads within its platform. Instead, This was intended to generate income through a freemium strategy. In it, users could pay for additional features and special services.
El’s design was minimalist and focused on visual content. That attracted a community of artists, designers and creatives in its early days. The platform offered a simple user experience and elegant aesthetic, setting it apart from other more saturated and commercialized social networks.
Despite its promising launch and initial media attention, It ended up closing less than a year ago.. One of the main problems was the difficulty in maintaining and scaling its user base. Although there was an initial spike of interest and a large number of registrations in the first few months, many users found the platform less attractive once the novelty wore off.
For all this, it seems that the internet advertising model has a lifespan for a whilealthough it will be transformed with the change that the cookie model means in the coming months.