Facebook and Instagram set to go ad-free in the UK

Business owners, especially those in the ecommerce sector, could be hit hard by changes Meta is proposing that could allow customers to opt out of ads on sites like Facebook and Instagram.

For those who advertise online on either platform, there could be a significant impact on their earnings as Meta brings in a new subscription model for users that would allow them to use the platforms ad-free.

The move is due to “UK regulatory guidance and following extensive engagement with the Information Commissioner’s Office (ICO),” says the social media company. Specifically, the move is to quash regulatory concerns about personalised ads served using users’ data.

What is the new subscription model?

Meta has formally announced the new subscription model on its blog. It explains that it will cost £2.99/month on the web or £3.99/month on iOS and Android, for the first Meta account.

“It is more expensive to subscribe on iOS and Android because of the fees that Apple and Google charge through their respective purchasing policies”, it explains. Those with additional accounts will pay £2/month on the web or £3/month on iOS for each of these.

Users can expect the option to subscribe will appear “over the coming weeks”, says the company.

Those who choose not to subscribe will continue to see ads; though Meta does reinforce that they have some control including the Ad Preferences option. It reinforces that it does not sell personal data to advertisers.

Why is Meta doing this?

This is essentially an olive branch to the ICO, which had brought its concerns over targeted adverts to the company.

“This moves Meta away from targeting users with ads as part of the standard terms and conditions for using its Facebook and Instagram services, which we’ve been clear is not in line with UK law,” said an ICO spokesperson.

A similar ad-free model is already available in the EU, but it has been deemed problematic by regulators. It is also more expensive than the UK offering, initially set at €9.99 a month.

As The Guardian details, the European Commission fined Meta €200m arguing that the access to a version of the platforms that uses less personalised data to serve ads should be free. It added that the subscription model goes against the Digital Markets Act, and that those not paying the fee should get an equivalent service.

Indeed, Meta took a dig at the EU in its blog post announcing the UK model. It wrote: “EU regulators continue to overreach by requiring us to provide a less personalised ads experience that goes beyond what the law requires, creating a worse experience for users and businesses.”

What does this mean for SMEs?

The impact will be dictated by how many users opt to subscribe. For some customers with multiple accounts, the costs of going ad-free will quickly accumulate.

It looks unlikely that Meta will back down as it states firmly in its blog post that “personalised ads are the best experience for people and businesses”. It also is effusive in its praise of the UK’s “more pro-growth and pro-innovation regulatory environment”.

It also mooted this subscription model in March so there has been quite a build-up. As with the rise of AI search, businesses will have to monitor the customer take-up to understand the revenue impact, and adapt accordingly.
Not least because marketing on Meta is not a cheap option. Firms will need to assess whether this marketing spend might be better used elsewhere if their engagement drops.