Meta ad-free plan: Time for brands & agencies to think hard and fast?

Although Meta’s ad-free subscription plan is yet to reach India, industry players say that agencies must consider diversifying mediums & platforms while focusing on sharper content-creator collabs

by Nilanjana Basu
Published - October 11, 2023
5 minutes To Read
Meta ad-free plan: Time for brands & agencies to think hard and fast?

Earlier this week, digital advertising players woke up to reports saying Meta, the parent company of some of the most used advertising platforms in the country, was mulling over bringing in an ad-free subscription plan to India by 2024. Industry watchers soon realised that if and when this plan is implemented, brands must diversify their platform strategy and also work with content creators to produce engaging and viral content.

As per a Wall Street Journal report, Mark Zuckerberg-owned social media giant is looking at a $14 subscription plan for its platforms - Facebook and Instagram - in the European Union for users to go ad-free. For India, the move is said to be in the early stages, with views that the plan is being set up due to rapid changes in internet regulations in the country.

India is a large market for Meta, given its population and recent increase in smartphone penetration. Facebook India Online Services, the Indian arm of Meta, recorded 74% growth in gross ad revenue at Rs 16,189 crore for FY22. With such growth seen by the company in a country booming with influencer marketing and advertising on its platform, it is a big change for the A&M industry.

We spoke to industry players to understand what this move meant for the advertising sector.

Sayak Mukherjee, Founder/Director at Brandwizz Communications said, “The subscription model will offer an improved user experience with fewer ads, leading to a potentially more engaging and less intrusive platform. However, suppose more users opt for an ad-free subscription. In that case, it may limit the data available for targeting ads, making it more challenging for advertisers to reach out to specific audiences. Advertisers may need to reassess their budgets and ROI expectations.”

According to Hitarth Dadia, CMO and Partner, Nofiltr Group, Meta's potential introduction of an ad-free subscription plan in India by 2024 could enhance the ad industry. “If this happens, it might lead to fewer traditional, sometimes intrusive ads on Facebook and Instagram. Traditional inventory businesses will need to find new ways to connect brands with their audience, like emphasizing a lot more on influencer marketing and creative content. Advertisers will need to be more strategic in reaching users who opt for ad-free experiences. It's also a good reminder that the advertising landscape is changing, and everyone will always need to adapt to stay effective in engaging consumers.”

On the other hand, Pranav Agarwal, co-founder of Sociowash, believes that while this could be an interesting move it is completely opposite to the current consumer behaviour. “Users are not accustomed to paying for ad-free subscriptions, be it for OTTs, music, games, or even social media. A case in point is YouTube - YouTube Premium has a mere 800,000 paid subscribers, which is less than 1% of its user base in the country, the other 99% + audience is happy waiting for 5 seconds to skip the ad. This sort of consumer behaviour barrier is very hard to break, even with the might of Meta!”

How to prepare?

Industry players believe that agencies will need to think further ahead into diversifying their chosen mediums and platforms. While doing so, they will need to pay special attention towards content-creator collaborations.

On this note, Mukherjee says, “Agencies and brands must proactively diversify their platform strategy and reduce reliance on single platforms. Considering collaboration with content creators to produce engaging viral content with organic reach abiding by the algorithm might be an interesting idea.

Brands need to prioritize and nurture customer data. As there will be many other channels supporting the key objective of brand recall. Including the very own WhatsApp by Meta, which is really building opportunities for businesses and advertisers in the coming days. Please note that with growing concerns on privacy and regulations - this might be a good alarming call.”

Dadia also believes agencies and brands should prepare for Meta's potential ad-free subscription plan by diversifying their advertising strategies. “This means focusing on quality content/original content and exploring alternative advertising channels beyond Facebook and Instagram. Influencer marketing will become even more crucial, as influencers can authentically engage with users who opt for ad-free experiences.

Staying updated on Meta's developments and user adoption rates for the subscription plan is essential. Brands and agencies should also be ready to adapt quickly and experiment with new approaches to reach their target audiences effectively. Flexibility and innovation will be key in navigating this changing advertising landscape.”

As for Agarwal, not much change will happen immediately. “Our strategies to attract the top 1% audience will have to evolve over time. We think there will be a higher role played by content creators and brand collaborations to drive positive communications around the brands, and the role of organic reach within niche categories will increase. Having said that, we are prepared to make any changes and adapt to the always-evolving ecosystem. Marketers are good with that.”

Luxury segment to see max impact?

A few players suggested that the high-paying luxury industry could take the biggest hit.

Mukherjee believes that the segment of the audience ready to buy subscriptions for ads will be the target which will be most impacted. “This is the exact audience segment that will be out of the radar for advertisers with this move. Luxury segment and high-ticket advertisers will find it challenging to navigate their ads to the right audience.”

Agarwal also said that the luxury category will face difficulty if this move comes into play. “Lux-marketing will be impacted the most since the overlap between the audience who will choose ad-free subscriptions and those who indulge in luxury goods and services is the maximum.”

Sharing another perspective, Mukherjee said, “India is a price-sensitive market. Meta still keeping content accessible to non-subscribers with ads might also lead to most users remaining in this free model. Hence, it might not be a challenge for brands to target mass audiences and price shoppers.”