Impact of UK ad-free subscriptions on advertisers

What does an ad-free subscription mean for advertisers in the UK?

Meta recently announced that users in the UK can choose to pay £2.99 per month (from desktop) for an ad-free subscription. I’ve seen it said that this might actually be a good thing for advertisers.

But is it?

argument

The argument goes like this…

If someone is willing to pay to remove an ad, they are not your customer in the first place. By paying this subscription fee, they prove that they will not click on your ads. By removing these people from the user pool, it may actually make ads more effective.

In theory, this makes sense. But I don’t think it’s that simple.

why not persist

Let’s consider those who would like to remove ads from Facebook and Instagram. Assume they do this because they hate ads and will never click on them. However, this generalization does not end there.

Just because someone paid to have the ads removed doesn’t mean they didn’t click on them. They may be paid as status or as an attempt to improve their own user experience. They may know they’ve clicked on ads in the past, but they want to limit their feed.

Even if they claim they never clicked on an ad, we’ve heard it before. What people say rarely reflects on their work. Good advertising that solves a problem is often not considered advertising at all.

There are also demographic issues for this. By subscribing, they prove they are internet savvy and willing to pay for things online. They may be power users of these applications. Aren’t these our potential customers?

Given the lower price of 2.99, I expect more people to sign up in the UK than in the EU. META frames the EU version to appease regulators. But the UK version is apparently for sale.

time will tell

So I don’t buy the argument that by removing these people, the potential revenue pool for advertisers is improved. That said, the user pool is likely to be so deep that its impact is minimal.

So, will this hurt advertisers? Time will tell. However, it would be foolish to ignore it.

We may not yet see the end of options. As regulatory pressure increases, it will spread to other parts of the world.

What happens if this is a huge meta victory? Maybe it will be popular, which could give a huge boost to ad-free experience-driven usage. If there are subscribers who are more active, it can even improve the activity of those who don’t sign up.

Of course, that doesn’t mean the advertising business is disappearing. The main reason why ad-free subscriptions are attractive is because the alternative is an ad-driven model. But it’s too early to say how this will affect everyone involved.

Watch closely.