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Internal memo reveals Meta out to identify ‘possible paid features’ for Facebook, Instagram

September 2, 2022 | | Print Article

Meta is setting up a product organization to identify and build “possible paid features” for Facebook, Instagram, and WhatsApp.

That’s according to an internal memo sent to employees last week that was obtained by The Verge, with the move coming as Meta’s advertising business takes a severe hit due to Apple’s ad tracking changes.

The new New Monetization Experiences group will be led by Pratiti Raychoudhury, who was previously Meta’s head of research, according to the tech news site.

“Facebook in July reported its first ever yearly decline in revenue for the second quarter, announcing a 1 percent drop to $28.8 billion, and the social network said growth could fall further in the next quarter. Net income – profits – plunged by 36 percent compared to the previous quarter, to $6.7 billion,” the Daily Mail reported. “Apple’s new ‘Ask app not to track’ feature that’s a prompt on iPhones has reportedly cost Meta $10 billion in ad revenue just last year. During its most recent earnings call, the company also projected that third-quarter revenue to fall further, to between $26 billion and $28.5 billion, saying that ‘a continuation of the weak advertising demand’ would weigh on sales.”

Meta’s VP of monetization overseeing the effort, John Hegeman, told The Verge the company is still committed to growing its ads business and has no plans to let people pay to turn off ads in its apps.

“I think we do see opportunities to build new types of products, features, and experiences that people would be willing to pay for and be excited to pay for,” Hegeman said, without elaborating on paid features that are being considered.

Which is not to say that the free options are going anywhere anytime soon — Meta’s revenue is almost entirely from ads, which rely on traffic.

“I think if there are opportunities to both create new value and meaningful revenue lines and also provide some diversification, that’s obviously going to be something that will be appealing,” he said.

Other social media apps are looking to charge users, with The Verge noting that TikTok “started testing paid subscriptions for creators earlier this year, Twitter has paid Super Follows, and Discord makes its money entirely from its Nitro subscription.” Telegram and Snapchat also added paid tiers this year that unlock additional features, according to the article, with Snapchat’s endeavor being seen as “an early hit.”

“We’re obviously paying attention to what’s going on in the industry,” said Hegeman. “And I think there are multiple companies that have done interesting things in this space that I think hopefully we can learn from and emulate over time.”

TikTok is seen as a hindrance to Facebook’s growth, but Meta CEO Mark Zuckerberg said in late July that the economy is hurting digital advertising.

“Engagement trends on Facebook have generally been stronger than we anticipated and strong Reels growth is continuing to drive engagement across Facebook and Instagram,” Zuckerberg said during a conference call with analysts, according to CNBC. “That said, we seem to have entered an economic downturn that will have a broad impact on the digital advertising business. It’s always hard to predict how deep or how long these cycles will be, but I’d say that the situation seems worse than it did a quarter ago.”

“We’re slowing the pace of [our] investments and pushing some expenses that would have come in the next year or two off to a somewhat longer timeline,” he added.

The social media giant has betrayed the trust of so many of its users through heavy-handed censorship that is seen as politically motivated that there isn’t much support for the latest money-making scheme:

Tom Tillison
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