A New Vision For Social Platforms or a Sidestep Around Data Regulation?

Meta has officially announced it will be offering users an ad-free subscription model for Facebook and Instagram. This will be available within the EU, EEA and Switzerland starting next month.

The offering appears to be a move to around Meta’s targeting and data collection practices. By allowing users to pay for the ability to remove ads, Meta believes it will meet the criteria to obtain freely given consent from users, which is a requirement under regional data protection law stating:

“The option for people to purchase a subscription for no ads balances the requirements of European regulators while giving users choice and allowing Meta to continue serving all people in the EU, EEA and Switzerland. In its ruling, the CJEU expressly recognised that a subscription model, like the one we are announcing, is a valid form of consent for an ads funded service.”

Call it coincidence or competition, but this news falls in the same week that Elon Musk’s X has announced two new subscription tiers. Premium Basic – costing users $3/month – and Premium+ at $16/month – will supplement the existing X Premium package and allow users a host of various add-ons, including post editing, longer posts and verification. X Premium allows users to experience an ad-free version of the platform.

How Much Will Be Charged and What is the Implication for Advertisers?

The initial cost for Meta’s ad-free subscription will be €9.99/month on web, or €12.99/month on iOS or Android across all linked Facebook and Instagram accounts. However, after March 1, 2024, it also says an additional fee – of €6/month on web and €8/month on iOS or Android – will apply for each additional account, meaning costs could quickly add up for users wishing to choose this model.

Given the fact that users can continue to use the ad-supported version they have been used to, it is unlikely we will see a huge uptake of the subscription and, on the whole, it will be BAU for advertisers and brands.

Whilst we don’t expect any significant fluctuations in advertising costs, this may represent a good time for brands to explore opportunities for diversification on other social or display platforms, particularly when looking to target high net worth individuals.  Regardless of the impact of subscription, exploring options outside Meta can help generate cost-effective incremental reach, particularly amongst audiences that aren’t currently active and engaged on Meta, or those individuals that do sign up for the ad-free subscription.

Overall, it is worth noting that whilst X has incentivised subscribed users with additional features, and Musk has frequently expressed his desire to turn the platform into “an all-encompassing central platform for social messaging, content consumption and commerce”, Meta’s announcement appears to be less a shift towards a new model and more a method to ensure Meta complies with new data practice rules.