Nearly 70% of Facebook users apathetic about advertising
Greenlight research supports idea of profit from paid-for ad-free service
A suggestion by Twitter founder Biz Stone that Facebook could make significantly more profit by offering a premium advertisement free service appears to be supported by research conducted by digital marketing agency Greenlight.
Stone last week suggested that Facebook could make $12bn per year if just 10% of its users took up a $10 per month ‘premium' service that would be free of advertising. The revenue from the hypothetical service would be three times the advertising revenue of $4.3bn that Facebook made last year.
Greenlight has highlighted that its Search & Social Survey 2012-2013, conducted at the start of this year, that 15% of users would be prepared to pay Facebook to see no ads with the majority, 8%, indicating they would be willing to spend $5 right up to $10 and even over, per month.
More importantly, close to 70% of respondents said that they ‘never' or ‘rarely' click on advertisements or sponsored listings in Facebook.
Facebook is due to report its Q2 results today, with how it handles models of advertising an essential part of the social network's financial performance.
Andreas Pouros, COO at Greenlight, noted then that Facebook had taken the success of advertising in peoples' newsfeeds on mobile and based its News Feed redesign on mirroring that format (or close to it) on all devices, which, in his view would help to boost revenues.
Analysts are optimistic about Facebook's results. JP Morgan expects Facebook's advertising revenue to rise 40% on the previous quarter to reach $1.39bn, with mobile accounting for a third ($446mn) of it, whilst those derived from desktop advertising are projected to fall 4% on the previous year as ad dollars continue to shift to mobile devices. Others have been cautionary, Cantor Fitzgerald for example, pointing to a weaker ad market in Europe, which it says could hurt Facebook's international revenue.