Paid versions of Facebook and Instagram, Gen AI for advertisers
- META plans to charge European users US$14 a month to access ad-free Instagram and Facebook, according to Wall Street Journal
- The financial impact to offer ad-free options depends on the uptake of paid subscriptions, pricing strategy, and the features bundled with it.
- META debuts generative AI features for advertisers, which can save time and resources while spurring productivity
META plans to charge European users US$14 a month to access ad-free Instagram and Facebook. According to a report by The Wall Street Journal, European users may be charged approximately US$14 per month when accessing these platforms via mobile devices or around US$17 per month on desktops. This subscription, named “subscription no ads” (SNA), is aimed at users who opt not to grant the company permission to utilize their personal data for targeted advertising. These premium offerings would guarantee an ad-free environment in compliance with EU regulations and court rulings aimed at restraining META’s data-collection practices. META is planning to introduce the SNA subscription in the upcoming months. Nevertheless, it remains uncertain whether regulatory authorities will view this proposal as a sufficient remedy, potentially prompting META to propose a more affordable alternative. Europe contributed 23% of the company’s ad revenue in 2Q23 and this move could substantially reshape META’s revenue model.
META announced that they are rolling out their first generative AI (Gen AI) features for advertisers, allowing them to use AI to (i) Create backgrounds: allowing advertisers to tailor their creative assets for different audiences (ii) Expand images: allows to adjust advertisers assets to fit different aspect ratios required across various products, like Feed or Reels and (iii) Text variations: generate multiple versions of ad text based on advertisers original copy highlighting the selling points of their products and giving them multiple text options to better reach their audience. META has conducted preliminary testing of these AI features with a diverse group of advertisers, and the initial results are promising. Advertisers have reported time savings of five or more hours per week, which translates to a significant one-month annual saving. However, META acknowledges that there is ongoing work required to further customize Gen AI output to align with each advertiser’s unique style and preferences.