Internal debate at Facebook as it considers a paid ad-free version

4 May 2018256 Views

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Facebook app on a mobile phone. Image: chainarong06/Shutterstock

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Would you pay for an ad-free version of Facebook?

Facebook’s business model – like many other online platforms that are free to use – depends largely on advertisers and the data of its user base. Put simply, the data people provide allows the company to serve more specific ads, allowing advertisers to create tailored campaigns in order to drive sales.

A change in the digital economy?

This business model is well-established within the data economy, but growing public awareness around the safety and value of their data in light of the Cambridge Analytica scandal, as well as the upcoming GDPR deadline, means this approach may not be enough for Facebook and other firms any longer.

It seems that the social networking juggernaut is considering this eventuality, as Bloomberg reported today (4 May) that there have been internal discussions at the company about introducing an ad-free subscription-based model of the service.

This is not the first time the company has looked at a premium version of its service, but anonymous sources say the prospect has been tabled a number of times in recent months.

In April, Mark Zuckerberg did not fully rule out the introduction of a subscription-based model during his congressional hearing. He said, “There will always be a version of Facebook that is free,” he said, leaving the door open for paid alternatives.

Internal research at the company last year found that users would not be receptive to a paid version, with findings saying users would perceive this as Facebook being greedy by asking for payment for a service that had previously been free.

Changing public views

Considering the changing public perception of data privacy and the financial value their data has for firms like Facebook, a premium version may be something many more users would consider at this moment in time. In fact, many people have cited data use as a primary reason for leaving the platform.

At the start of 2018, both Zuckerberg and COO Sheryl Sandberg spoke at length about the benefits of Facebook’s current ad-supported network. Sandberg said, “We certainly thought about lots of other forms of monetisation including subscriptions, and we’ll always continue to consider everything.”

A broad review of the entire business model is continuing at Facebook, while international politicians call for Zuckerberg to answer questions relating to the circumstances that led Cambridge Analytica to obtain user data from millions of profiles, and allegedly use this information to influence political processes.

Facebook app on a mobile phone. Image: chainarong06/Shutterstock

Ellen Tannam is a writer covering all manner of business and tech subjects

editorial@siliconrepublic.com