Amid continued pressure from regulators, Meta has announced some important changes for EU users. Changes include lowering the cost of ad-free subscriptions and rolling out “less personalized ads.”
Let’s discuss this…
Yuan’s announcement
Here’s what Meta says about “less personalized ads”:
In the coming weeks, EU users who choose to advertise on Facebook and Instagram for free will be able to choose to see “less personalized ads.” This less personalized ad option relies on less data…
Meta said the ads will be based on “a minimal set of data points, including a person’s age, location, gender and how a person interacts with the ad.”
Meta said that if users choose to see less personalized ads, it “could result in ads that are less relevant to the user’s interests. This means people will see ads that are not of interest to them.”
Meta’s Bad Bet
Meta initially created an ad-free subscription model for EU users because the company believed it would satisfy regulators. Meta believes this will provide users with two options:
1. Use Facebook and Instagram to run ads powered by their data
2. Pay to remove ads, and your data will not be used for advertising.
But regulators aren’t buying it. Now, Meta has been forced to slash subscription prices (twice) while offering the option of “less personalized ads.” It seems Meta made the decision to subscribe too early and now they are paying for it.
Impact on advertisers
Understanding the impact on advertisers is not about removing targeting inputs. I’ve seen some reactions that it’s not a big deal because advertisers have successfully scaled it up and used limited inputs. However, this affects the data points Mehta Can be used to serve ads.
Advertisers should pay close attention to this. How many users would sign up for less personalized ads? I’ve seen reports that Meta doesn’t hide this option – the user is prompted to make a choice. How will it affect performance?
Now that this is happening in the EU, it sets a precedent. We can see this elsewhere as well. This could be bad.
