In response to EU pressure, Meta✴ announced plans to serve European users on Instagram✴ and Facebook✴ with less personalized ads at no additional cost or at a reduced subscription price, The Wall Street Journal reports. However, the introduction of a new advertising format will affect the company’s revenue in one of its key markets.
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In the coming days, Instagram✴ and Facebook✴ users in Europe will receive notifications inviting them to switch to the new advertising format. Unlike current personalized advertising, which is based on a user’s broad history of activity, the new advertising will be based on content viewed during the current session, rather than the overall history of user activity, as has always been the case. However, some ads will continue to be targeted to users’ age, gender and location, and will expand to full screen.
The introduction of less personalized advertising comes amid growing pressure from EU regulators. Meta✴ previously did not provide users with a free way to opt out of having their preference history used for ad targeting for fear of lower revenue, and the new move could hurt the company’s business given that Europe generates about 23% of its revenue (according to its most recent financial report).
Meta✴ is also frustrated by the EU’s efforts to regulate technology, including requiring users to consent to the use of their data to train artificial intelligence. Most notably, the company had to delay the launch of its chatbots in the EU after regulators required Meta✴ to ask users for consent. At the same time, in an open letter, the company emphasizes that regulatory laws threaten to stifle the AI boom in the region, also arguing that personalized advertising is a common good for both users and advertisers.
The WSJ notes that “less personalized advertising” is Meta✴’s second move in a year to change advertising options in the EU. So, last fall, the company offered users an ad-free subscription, forcing them to choose either advertising or a monthly subscription for €13. The new subscription-free advertising option is an attempt by Meta✴ to regulate the situation and avoid fines that can reach up to 20% of the company’s annual revenue in case of repeated violations. As part of the new offer, Meta✴ will also reduce subscription costs to €8 on mobile devices and €5 for each additional account.