During Facebook's quarterly earnings announcement earlier this week, it revealed that in 2012 the company made $11.08, on average, per North American user. Facebook is in a bind here. On the one hand, the social giant wants and needs to rake in more revenue and advertisers. On the other hand, some of its users are concerned about the ads they are exposed to in their News Feeds--and how their private data is being used.
This got us wondering: What if Facebook users had the option of paying an annual fee to keep their data private and rid their News Feeds of ads?
The idea isn't as outlandish as it seems: Earlier this year, Mark Zuckerberg was granted a patent for a concept that would allow a user to "replace advertisements or other elements that are normally displayed to visitors of the user's profile page that are otherwise controlled by the social networking system." And yesterday, a Facebook spokesperson told The Atlantic Wire that Facebook intends to add controls that will let users hide mobile ads.
So what if Facebook charged users in exchange for an ad-free News Feed? Eleven bucks a year (not much more than what music subscription services like Spotify charge premium users per month) is a hypothetical pittance to pay to keep Facebook from targeting ads at you based on your social graph. Introducing a version of the paid service that would grant users access to certain features--in this case, the ability to wipe ads from their News Feeds--could essentially steer Facebook's business, a service that has remained free since its inception in 2004, toward a freemium-based model. Most freemium-model services lure users in at the free tier, then tempt those users to pay for extra features. Facebook already has a massive userbase.
Of course, in any freemium business, not everyone pays to use the product--but even if a hypothetical $11 Facebook fee bumped up to, say, $20 a year, that's still roughly equal to just two months of Spotify Premium.
If a freemium model were successful for Facebook, it could give the company a neat way out of having to prove that ads do, in fact, drive actual sales. A freemium model could also prompt Facebook to design better premium-level features that users would have to pay to access--the kind of products, perhaps, that LinkedIn churns out, products that enhance (rather than detract from) the user experience.
Perhaps the idea of a paid opt-out-of-ads model wouldn't appeal to a wide audience. There's no way to know for sure how users would react.
[Image: Flickr user Kilayla Pilon]