Social networks and the Internet without advertising: a utopia or can they really be sustainable?

Would you pay for ad-free viewing and more privacy? This is the question that Macedonia’s new regulations and business movements on major social media platforms invite us to answer recently. And the answer seems to be mostly no.

The pioneer in this was Elon Musk’s new Twitter/X, which, under the slogan of freedom of expression and independence, raised the price of Twitter Blue. Firstly, with the ability to reduce advertising. Then, with the more expensive option of 168 euros per year, eliminate them completely.

Meta was forced to follow in his footsteps in Europe. And we say this has been driven by the siege of regulations, the revision of the GDPR and the implementation of the new European Union Digital Markets Act.

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 offered not to show them ads or use their data for segmented advertising.

By the way, TikTok also conducted a small test at $4.99 per month., just like Snapchat. This remained an attempt.

Expanding attention to the media, who have opted for subscription models in recent years, we found another case in Spain. Recently, amendments to data protection regulations resulted in hundreds of websites overnight offering a payment option in their cookie banners to avoid segmented advertising. For many, this summary meant paying for confidentiality, and it does not seem to have been very successful.

Instagram without ads wouldn’t be sustainable: Meta’s solution is to charge you more than it loses, just in case.

The major platforms have their backs in case these models become a big success among users. The prices for the ad-free option imposed by Meta in the EU are almost twice as high as what it generates for each user who sees an ad. A sign that he doesn’t want to even remotely consider this option.

In specific numbers Meta’s ARPU (revenue per user) on social platforms in Europe averaged €64 in 2023. This is much less than almost 120 euros per year for advertising-free viewing.

The old Twitter data is difficult to find out after it became a private company in the hands of Elon Musk. For information that is published on a regular basis Information They estimate the number of paying users to be around 600,000. Of course: without separating those who pay for the basic ad-limiting option from half of those who pay for the Premium+ version to eliminate it entirely.

From Hypertext We contacted Meta and ContentPass, a German company that manages payments for opting out of cookies on more than 400 portals in Spain, but did not receive a response when we asked for data on the number of users who activated ad-free options.

But how many subscribers will it take to replace Meta’s EU revenues?

With Meta’s detailed quarterly and annual reports, it’s easy to understand how much Meta currently earns from advertising, and how many Europeans would have to subscribe to Meta’s services to replace those ad revenues.

Instagram and Facebook show that this is a utopia both in terms of revenue and recognition.

Meta has averaged 408 million monthly users over the last 4 quarters. Each user earned an average of $63.97 per ad. At these rates, Meta would need just over 200 million European subscription-paying users to recoup all advertising revenue.

To give you 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 have to pay.

Neither Meta has accounts, nor do users seem willing to pay for privacy. The other side is advertisers. There seems to be no end to the ways they can connect with consumers, clients and users.

Advertising is still big business on the Internet

Despite his attempts create metaverse and augmented reality, Meta’s business model is focused on providing targeted advertising based on user data.. A system that allows advertisers to reach specific market segments with amazing precision.

This not only improves the effectiveness of advertising campaigns, but also improves the user experience by displaying more relevant ads. In fact, Meta has calculated that every euro invested in its advertising system generates 3.37, and has published statements on its advertiser dashboards about the new restrictions.

However, his model took some serious hits. Growing concerns about privacy (or perhaps not so much) and the introduction of stricter regulations; such as the General Data Protection Regulation (GDPR) in Europe and Apple’s privacy updates for iOS have impacted how companies like Meta collect and use user information for targeted advertising.

Meta confirmed this in a statement announcing these measures several months ago:

We believe in an ad-supported Internet that gives people access to personalized products and services, regardless of their economic background. It also allows small businesses to attract potential customers, grow their business and create new markets, boosting the growth of the European economy. And like other companies, we will continue to champion the advertising-supported internet, including through our new subscription offer in the EU, EEA and Switzerland. But we respect the spirit and purpose of these evolving European rules and are committed to complying with them.

We will continue to invest in creating new tools that preserve the value that people and businesses receive from personalized advertising, while allowing users to control their advertising experience on our platforms.

Target

Memory of Ello and WT Social

Many have tried to create a social network without advertising. in vain. Wikipedia founder Jimmy Wales tried this with WT Social without much success.

With a little longer duration, but also already closed, we find Ello. Launched in 2014, Ello was promoted as an ad-free space focused on user privacy and a more authentic, high-quality social media experience. Ello positioned itself as an “anti-Facebook” social network. At a time when there were growing concerns among users about data privacy and the ubiquity of advertising on social media.

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 on its platform. Instead of, This was intended to generate revenue through a freemium strategy.. In it, users could pay for additional features and special services.

Al’s designs were minimalistic and focused on visual content. In its early days, it attracted a community of artists, designers and creatives. The platform offered a simple user interface and sleek aesthetic, setting it apart from other, more saturated and commercialized social networks.

Despite the promising launch and initial media attention, It ended up closing less than a year ago.. One of the main challenges was the difficulty of maintaining and scaling the user base. Despite an initial surge of interest and a high number of sign-ups in the first few months, many users found the platform less appealing once the novelty wore off.

With all this it seems that The online advertising model has a lifespan of some timealthough it will be transformed in the coming months with a change in the cookie model.