The social media landscape runs on advertising. Social media marketing works because ads are integral to how Twitter, Facebook, and Google make a large percentage of their funds. Companies, brands, and businesses have been using social media advertising for years now and the model is working fairly well. But now, the co-founder of Twitter just announced that Facebook should offer premium, ad-free service. Does the idea make any sense though?
Biz Stone Says Monthly Fee a Smart Idea
Apparently Biz Stone has been away from Facebook for a long time. He recently started using it again and has spoken his mind about an idea for Facebook that would supposedly help it bring in upwards of a billion dollars in revenue.
Yesterday Biz claimed that Facebook should make some changes to its service in order to bring in more revenue. His idea, as he’s quoted on AllThingsD is “For $10 a month, people who really love Facebook (and can afford it), could see no ads. Maybe some special features too.” It works for other services like Pandora and Spotify, so maybe Biz is onto something. It’s not exactly a feature that advertisers would be happy for users to adopt though. In terms of businesses and agencies, the core of social media marketing wouldn’t be very affected either; ads are a separate avenue for reaching consumers on social media.
Biz Stone has a bit of a point. For as massive as the user base of Facebook is, their ad revenues aren’t blowing away the competition proportionately. They do well enough, though. We’ll find out more about where Facebook is going in the future next week as its second quarter earnings report is released. I find it hard to believe that Facebook would adopt something like this any time soon though.
What’s Wrong With the Idea
There’s a lot wrong with the idea, and David Murphy over at PC Mag has put together a great critique on why it probably won’t happen. Biz Stone is looking to services like Pandora for their subscription success and thinks it can work for Facebook just as well, if not better. That looks like where the problem is.
As David writes, “Pandora’s model is the exception to the general rule that today’s apps are cheaper than they used to be and generally ad-supported.” Pandora only costs $36 a year, versus a proposed $120 fee for Facebook premium. I don’t think people are going to go for that.
Further, it goes against the advertising model that Facebook has been with for years. As David writes, a premium service is a “snake-eating-its-own-tail” plan that goes against everything Facebook has developed for its advertisers.
Probably Won’t Happen
I think it’s safe to say that Biz Stone’s idea will remain an idea for a long time. Facebook has shown itself to be creative and has adapted to going public relatively well. Advertisers don’t need to worry, and even businesses and agencies wouldn’t have to worry. A change in advertising policy doesn’t affect true social media marketing, which is all about making a connection with consumers and building your brand.
Would a premium Facebook appeal to you? Do you think it’s a good or bad idea for Facebook? Is Biz Stone just trying to get attention?
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