No less a person than Biz Stone, a founder of Twitter, suggested that one of the ways to revive faltering Facebook Inc. (FB) is to offer an advertising-free version for members. Of course, Facebook must get something out of it. Stone suggests that members pay for the privilege of this ad-less environment.
The irony of Stone's suggestion is that Twitter has had trouble finding its own advertising model. Marketers have not warmed to buying little ad tweets in among the real ones posted by users. Ads often open these marketers to public ridicule, if Twitter users are unhappy with them. A bank may find Twitter members who do not like its ads accusing it of lending money to old ladies at usurious rates. Financial firms are already so poorly regarded as to not want to take such risks.
However, on to the merit of Stone's suggestion. In a blog post he wrote:
People love Facebook. They really love it. My mother-in-law looks hypnotized when she decides to put in some Facebook time. In general, the ads on Facebook don’t seem particularly useful or engaging. However, ads on the service are universally tolerated because that’s what makes Facebook free and free is nice.
Anywhoo, now that I’m using it and thinking about it, I’ve got an idea for Facebook. They could offer Facebook Premium. For $10 a month, people who really love Facebook (and can afford it), could see no ads. Maybe some special features too. If 10% percent of Facebook signed up, that’s $1B a month in revenue. Not too shabby.
The reasons this kind of suggestion lacks merit is that a guess that 10% of Facebook users would opt out of ads for a fee could be, and likely is, wildly high. Many Facebook members are too young to come up with $120 a year. Most others probably ignore Facebook's ads, as do most Internet users who, after years on the web, see display ads as so much dull wallpaper.
The other problem with Stone's suggestion is that Facebook does not want its current advertisers to know that even one user hates ads enough to pay the $10. The option would demonstrate that avoiding a nuisance is worth real money. And that nuisance is advertising.
Biz, stick to finding a way to get your own ads that no one wants to see.
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