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1st November 2023

Meta Introduces Ad-Free Subscriptions

This step by Meta aims to boost revenue amidst heightened competition.

It’ll be interesting to see how companies adapt strategies to embrace these evolving dynamics.

Meta (parent company of Facebook and Instagram) has announced the introduction of a new subscription option in the EU, EEA, and Switzerland. This move is a response to changing European regulations, including the General Data Protection Regulation (GDPR) and the Digital Markets Act (DMA), these aim at granting users greater control over their data and privacy rights. Notably, whether this is available in the UK has not been mentioned, although similar GDPR protections do apply.

Starting in November, users in these regions will have the choice to either continue using the platforms for free with personalised ads or subscribe to a paid option to avoid seeing ads. Subscribers will have their information excluded from ad targeting – The monthly subscription cost of approximately €9.99 seems relatively high for an ad-free experience.

This change follows the rules in Europe and gives users a choice. Those who stick with the free version will keep a similar experience and can control the ads they see using tools they already have. For advertisers, the update means the ability to continue running personalised advertising campaigns in Europe, reaching users who opt for the ad-supported service. Meta says it will continue investing in developing new tools to maintain the value that both users and businesses derive from personalised advertising, while also allowing users more control over their ad experiences.

In addition, Meta is pausing showing ads to kids under 18 because there are new rules that protect them more – The whole experience is about showing ads that fit you personally, and that’s not so simple for the younger audiences.

In essence, how will this affect companies advertising there?

Fewer people seeing ads could potentially reduce the audience available for targeted advertising, leading to a decrease in revenue. Advertisers will need to become more innovative and create high-quality ad content to engage the remaining audience. This shift might also cause fluctuations in ad prices and push companies to diversify their advertising efforts across multiple channels. Furthermore, if companies heavily rely on reaching specific age groups, the pause on advertising to under-18s might impact their ad revenues and overall campaign effectiveness, especially if they cater to younger audiences.

Dan Grossman our Head of Media believes our success is about continuing to target precise audiences with innovative strategies.

“Meta’s latest move mirrors the ongoing trend of stricter digital marketing regulations, aligning with GDPR and prioritising privacy, especially among younger audiences. Similar to ad-free subscription models in other platforms, this step by Meta aims to boost revenue amidst heightened competition. Despite challenges for our youth-focused clients, particularly in higher education, we’ve proactively explored and tested alternative digital marketing strategies successfully. As with most advertising, if the right audiences are reached with the right messaging at the right time, digital marketing and ad personalisation can continue to generate effective campaign performance.”

In essence, at €9.99 a month, it’ll be intriguing to witness how this impacts advertising reach and how companies adapt strategies to embrace these evolving dynamics.

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