Is the era of social media advertising coming to an end?

X

Currently, X offers a premium subscription service for $15 CAD a month. Recently though, Musk has hinted at a shift towards a monthly fee for all users to combat the rise in automated accounts (bots) by making it more costly and complex for users to maintain multiple accounts.

What’s of more significance to advertisers though is that Musk has also hinted at an ad-free subscription service on X. Although X's advertising revenue has declined due to concerns over Musk’s leadership and the platform’s content moderation policies, it remains an important channel for reaching decision makers, thought leaders, and engaged Canadians.

Meta

Following in X's footsteps, Meta is also considering offering ad-free subscription tiers for Facebook and Instagram. The evolving data privacy regulations in the EU have made it challenging for Facebook to provide personalized ads, prompting Meta to explore ad-free alternatives to balance user experience and user revenue.

A proposal submitted to EU officials suggested preliminary pricing of around $14 USD (approximately $19 CAD) per month for an ad-free Facebook and $17 (approximately $23 CAD) per month for both Facebook and Instagram. While paying $276 CAD annually for an ad-free experience may seem steep, Meta must find ways to replace ad-generated revenue per user.

What do these proposed changes mean for advertisers?

Lately there’s been a growing trend towards subscription models for social media, but are users willing to pay for an ad-free experience? A 2021 poll by Privacy HQ found that 72.9% of respondents preferred viewing ads to keep social media networks free, while 27.1% would pay for an ad-free experience. These numbers alone indicate that even if ad-free subscription options are introduced, many users feel the cost outweighs the benefit.

It's also important to remember that social media is just one avenue for successful paid advertising. There are numerous other ways to reach your target audiences, from podcasts and search ads to digital display and out-of-home. At spark*, we’re believers in the importance of a multi-channel approach to ensure your message reaches the right audiences at the right times.

Finally, paid advertising should only be one component of your marketing efforts. A successful strategy will also incorporate earned, shared, and owned channels. Organic social media, email marketing, earned media, influencer marketing, events, partnerships, and more are all key tools to help you effectively reach your target audience.

Parting thoughts

Although Musk has his own reasons for introducing an ad-free X, Meta is more focused on appeasing regulators in the EU while maintaining profits – meaning Meta’s proposed changes may never affect Canadians. While it's uncertain what Musk will ultimately decide for X, it is unlikely that Meta will ever shift to an entirely subscription-based model.

Whether you’re looking for advice on how to navigate the changing social media landscape or are looking to plan your next great campaign, drop us a line at hello@sparkadvocacy.ca.