Would You Stop Advertising on Facebook if It Offered Users an Ad-Free Subscription?
The idea of having a paid but ad-free Facebook account has been floating around for a long time now. While Facebook founder Mark Zuckerberg was usually adamant that it wasn’t going to happen, the Cambridge Analytica issue appears to be swaying his thoughts. The question now is— “how much would an add-free Facebook cost?”
Zuckerberg had previously stated that people, in general, do not like paying for a service. He also emphasized that Facebook doesn’t “offer an option today for people to pay to not show ads.” However, that doesn’t mean that there won’t be an ad-free service in the future.
Some sectors have pegged the cost of an ad-free Facebook to be somewhere between $11 to $14 per month. The amount is based on the social media giant’s recent financial reports. The company earned $84 per user last year in its most lucrative markets, the US, and Canada. If the company’s expected 35% growth rate holds in 2018, then it could earn as much as $113 per user. But, if you take into consideration that subscribers would likely have more disposable income than free users, thus making them more attractive to marketers, then it would make sense that an $11 monthly fee would be needed to make up for the revenue Facebook would lose.
Analysts have speculated that even if 10 percent of users subscribed to the proposed ad-free version of Facebook, there would be no drop in revenue for the company. In fact, Facebook could see a boost in revenue because it would bring in earnings from the subscription fees and advertising budgets would’nt change much.
However, if the subscription fee is low enough to be broadly accepted by users, advertising on Facebook would be less effective and brands and businesses would advertise elsewhere.
For now, most advertisers don’t seem to be put off by Facebook’s proposed ad-free subscription. The social media giant’s two billion active users mean that every other person you know has an account on the platform. And unless ad-free subscriptions cause a big decline in Facebook’s user base, advertisers are not likely to jump ship.
