Technology
It was high time for meta to start charging users for services
Global Banking and Finance Review
Company
ByLuke Lintz
When Meta decided to test a subscription-based verification service in New Zealand and Australia and eventually in the United States, it looked like it followed in Twitter’s footsteps. Elon Musk’s struggles to make the company profitable have been news fodder ever since he acquired the company. Twitter Blue’s revamp’s job was to help the revenue side of the equation.
Meta and Twitter are completely different cases, however, with different implications. Twitter was infamous for its inability to profit, even when it had strong earnings, and it’s been experimenting with Twitter Blue since 2021.
With Meta, it was something different. Meta has Facebook and Instagram in its roster and is a giant in the digital advertising space. Facebook and Google, called “the duopoly” in the industry, have controlled over half of all digital advertising since 2014. In 2022, however, that changed.
For the longest time, Facebook kept its services “free” to its users by banking on their attention. In addition, the data users provided enabled Facebook to develop a sophisticated and effective service for its advertisers.
The users’ attention was on the product. The buyers were the advertisers. The shift in 2022 was that buyers increasingly sought that exact product at different places. Meta blamed its Q4 2022 slump on the lack of demand. Still, companies such as TikTok and Amazon, who are attacking the duopoly’s position as the digital advertising market leaders, didn’t seem to feel that slump.
The social media landscape is changing, and Meta finds adapting challenging. The company announced its first-ever daily active users loss in Q4 2021. In 2021, Apple launched its App Tracking Transparency feature. It significantly affected platforms’ ability to track users on Apple devices, with Facebook projected as the social platform affected the most by the change.
Facebook’s advertising model’s in trouble, and the parent company is turning to its existing user base to look for ways to beef up its revenue. The decision to make the coveted verification something users can buy might increase user loyalty.
While it’s still early to see how the rollout turns out, there are some possibilities that we at the HighKey Agency think might have a chance of happening. Meta will get more subscriptions because of the demand for it. However, if it’s received exceptionally well, Meta could create several different services to monetize its user base.
Businesses might get a subscription service allowing their organic content to reach more people. Meta could also create a subscription to incentivize content creators on the platform through a better ad revenue-sharing program. Verification can remain organic for the public or notable people and available for a fee for regular users.
The model of centralized social media used to extract revenue from its user base has run its course. Social media’s been “free” for far too long, and the new revenue models might help it stay afloat and improve what they’re offering to its user base.
About Luke Lintz:
Luke Lintz is the founder and CEO of HighKey Enterprises LLC, a Puerto Rico-based company that helps brands and influencers become “HighKey” famous through digital and social media marketing. Luke founded the company with his brothers, Jordan and Jackson Through HighKey Clout’s celebrity giveaways, he triggers social growth for some of the most influential figures on social media. Meanwhile, he helps create elite brands with video, design, and press publications through HighKey Agency.
A subscription-based service is a business model where customers pay a recurring fee at regular intervals to access a product or service, often providing ongoing benefits or features.
Digital advertising refers to marketing efforts that use the internet and electronic devices to promote products or services, including ads on social media, search engines, and websites.
User verification is a process used to confirm the identity of a user, often through methods like passwords, biometric data, or two-factor authentication, to enhance security.
User loyalty refers to the tendency of consumers to continue buying from a particular brand or service due to positive experiences, satisfaction, and emotional connection.
A digital advertising duopoly refers to a market situation where two companies, like Facebook and Google, dominate the majority of digital advertising revenue and market share.
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