App Trends for Growth Marketers #chapter 5. Social apps

A new dawn for social apps: ad-free social subscriptions

In November 2023, Meta launched an ad-free subscription for EU users, providing access to Facebook and Instagram at €9.99 per month. This also enabled EU users to opt out of Meta’s data tracking for advertising purposes. Consequently, following complaints from privacy activists, the company reduced the price of this to €5.99 per month in March 2024. Similarly, TikTok is currently testing a $4.99 per month ad-free subscription tier in one unspecified English-speaking market outside of the US.

Impact of Ad-free Subscriptions to be aware of

Ad-free subscriptions have several effects, such as –

• Subscription Overload: With the availability of multiple platforms offering ad-free social and entertainment media subscriptions, paying for multiple platforms together may become too expensive for consumers. This could limit the widespread adoption of ad-free social media.

• Audience Shift: Ad-free social media may primarily attract affluent consumers, requiring marketers to adjust their strategies accordingly.

• New Engagement Methods: Marketers need to explore alternative ways to reach their target audience in the face of potential ad-free social media adoption.

• Cross-Platform Tracking: Measuring ad campaign effectiveness may become more challenging as consumers opt for ad-free social media, necessitating cross-platform tracking solutions.

• Weak Subscription Appeal: Less than half a percent of X’s users pay for the premium plan. Around 6% and 4% of LinkedIn and YouTube users pay for their platforms’ premium plans, respectively. People aren’t enthusiastic about paying for social media subscription plans, even those that offer exclusive content and features. This suggests that other social media platforms may struggle to get users to pay for ad-free subscriptions.

Marketers must adapt to the evolving subscription landscape and potential ad-free social media trends to effectively reach their target audience and achieve their marketing objectives.

Impact of Ad-Free Subscriptions on Targeting Strategies

Ad-free subscriptions will not significantly impact targeting strategies on social media platforms, as targeting methods have recently become broader. However, users who opt for ad-free subscriptions will no longer be reachable through social media advertising.

Alternative Strategies to Reach Ad-free Users

Marketers must adapt their targeting strategies to reach users who subscribe to ad-free plans. This may involve:

• Make educated hypotheses regarding the demographics of ad-free subscribers. Test and learn assumptions.

• Diversifying their media mix to include non-social platforms such as search, programmatic advertising, and Connected TV (CTV).

• The exact impact of ad-free subscriptions on targeting will depend on the specific platform and the percentage of users who subscribe to ad-free plans.

• Marketers should continue to monitor the situation and adjust their strategies accordingly.

• Programmatic ad spending is booming, Global Programmatic ad spending reached $456 billion in 2023 and is projected to reach $779 billion by 2028.. Similarly, CTV ad revenue is expected to reach $25.9 billion globally in 2024 and surpass $42 billion by 2028. These trends indicate the growing popularity of non-social platforms like CTV and programmatic advertising, offering marketers alternative opportunities to connect with their target audience.

Crafting Engaging Content for Users

The key is to focus on creativity, which is the most effective targeting lever for social media advertising. Marketers must create better, engaging advertising experiences to prevent users from preferring ad-free solutions.

The Decline of Hyper-Personalization

In the past, brands could use hyper-personalization to target consumers with the right product at the right time. However, this approach is no longer as effective due to changes in consumer privacy.

Creative Ad Variations

Marketers should create more distinct ad variations, such as product versus lifestyle ads or brand shoot versus influencer ads, instead of ads with a border versus ads without a border. Making small ad changes is not as effective as creating distinct ad variations.

By focusing on creativity and creating distinct ad variations, marketers can create more engaging advertising experiences that will help social media platforms reach the right consumers quickly through machine learning.

Don’t forget to read the rest of the App Trends series available here

• Chapter 1: Cookie Deprecation is here – read now
• Chapter 2: All About AI. The advantages and challenges for marketers
• Chapter 3: The growing significance of Apple
• Chapter 4: The TikTok User Base Peaks
• Chapter 5: A new dawn for social apps

Please contact us if you want to learn how we ensure clients capitalize successfully on these trends or have any growth media questions.