One of Twitter’s co-founders, Biz Stone, has suggested that Facebook might benefit from moving to a Freemium model. This would mean that the service would still be free to sign up to and use but for those users who find the ads too intrusive there would be an option for them to pay a monthly subscription and in return receive an ad free Facebook. It is interesting that a founder of a rival social network would make a suggestion on how a competitor could improve their business. Biz does not say whether he thinks that Twitter should also follow his top tip.
In the article he points out that if just 10% of users take up the option for a $9.99 monthly, ad free subscription it would generate somewhere in the region of a billion dollars a month for the social media giant. That must be quite a compelling figure for any CEO to think about. Stone looks at the freemium model in relation to music services such as Pandora and Spotify to back up his theory that there is a market for freemium social media websites.
It is certainly an argument that I can relate to. I have wondered why Facebook has not gone down the freemium root for the best part of two years. This would still mean that the statement on their home page that “It’s free and always will be” is still true and I am not proposing that those who take advantage of a subscription get extra features, simply that they will not see any more ads.
As somebody who regularly creates Facebook advertising campaigns for a variety of companies I can say that Facebook advertising can be very successful in generating new likes for a page or driving traffic to external websites. Depending upon the sector that you work in I would even go so far as to say it is one of the best methods of online marketing that a company can use. Some might think that I would want my ads to be seen by as many people as possible, but I only want my ads to be seen by people that are potentially going to be swayed into following the call to action within the ad.
If an ad is seen by a person that does not like ads on Facebook then while they might fit all the other demographics for the ad such as age, location and interests the reality is that they are very unlikely to click on the ad and the fact that it is present on their screen may actually engender feelings of animosity towards the brand. I would be very surprised if an ad on Facebook was able to achieve a 10% click through rate. Yet if 10% of users are irritated by the ad you could be doing yourself more harm than good by running the ad. Advertisers do not want their ads to cause offence and so it would be in everybody’s best interests if those Facebook users do not want to receive the ads they should not receive them. As Facebook is a business and needs to fund itself it would not be fair that the opt out is for free. Facebook would still be providing a service it is just that users could choose whether to pay for it themselves or allow advertisers to pay for it instead.
When I prepare a campaign and I am looking at the number of people that it will target I would prefer to know that rather than it being 100 000 users in the demographic of whom 10 000 will hate the ad’s presence it is only 90 000 users but the ad itself will not cause any offence.
I can see benefits for advertisers, users and Facebook if the social media website went freemium, I wonder how long it will be before Facebook does?