Facebook selling subscriptions: “After years of non-stop growth the online-advertising business has hit a speed bump. The great one-off shift of ad budgets from off-line locations, like newspapers, to the web is mostly complete.”
Since 2021 mobile advertising has been hampered by anti-tracking rules pioneered by Apple, which make it harder for apps like Facebook to target ads and measure their effectiveness.
The results have been painful. Meta, Facebook’s parent company, has reported falling revenue in each of the past three quarters. Despite a recent rally its stock is trading at less than half the value at its peak in 2021.
Subscriptions are no substitute for ads. Snap said 2.5 million people had signed up to Snapchat+, less than 1% of its app’s 375 million daily users. That implies annual subscription sales of no more than $120 million, or less than 3% of Snap’s total revenue last year.
Google, which runs the Android operating system, and Apple, which runs ios, make no money from apps’ advertising revenue, but take a cut of consumers’ in-app purchases, including recurring subscriptions.
Big Tech has been creeping into upcharging for basic functions for a while. Google makes additional tech support part of its One subscription, whose main selling point is cloud storage. Apple, too, has turned privacy and security into luxury products.
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