Everyone hates ads on social media. Or do they? New research suggests that, at least on Facebook, users don’t actually mind the steady stream of ads.
It’s a bold claim—not only because it cuts against conventional wisdom, but because conducting robust research on the effects of online advertising is very difficult to do. To land a proper experiment, researchers would have to find a platform where some users see ads and others don’t—a rarity on today’s internet.
But in fact, a small percentage of Facebook users live in just such a special commercial-free zone. They’re called the “no-ads holdout group”—roughly 14.5 million people who never see ads in their Facebook News Feed. The company uses this randomly assigned segment as a control group in their own internal research, but Kellogg’s Nils Wernerfelt and colleagues saw it as a way to answer their own question.
“There are questions about how social media should be regulated, and a perennial topic that comes up is all these creepy targeted ads,” says Wernerfelt, an assistant professor of marketing. “We saw a chance to run a pretty clean experiment and just ask, ‘How much do people actually care about this?’”
The surprising answer seems to be not much at all. When asked to put a dollar value on how much their Facebook experience was worth to them, the answers were nearly identical between users who saw ads in their News Feed and those who didn’t. Taken together, these findings imply that the presence or absence of ads doesn’t materially matter to Facebook users.
“We expected that people would not like the ads,” Wernerfelt says, “but the results suggest that people may actually just not care that much—and that all the regulatory brouhaha about this may be misplaced.”
A data jackpot
The main results in the team’s paper stem from a survey experiment that was conducted in 2022. At that time, Meta’s no-ads holdout group had already been running for more than nine years, meaning there were millions of users on the site who had gone nearly a decade without ever seeing an ad in their News Feeds. For most researchers studying the effects of advertising, this kind of large-scale data and long-term experiment is almost impossible to come by.
“Getting the resources to answer a question like this—an academic can’t do it alone,” Wernerfelt says. “You need to use the infrastructure and data that Meta has.”
But why did Facebook create the holdout group in the first place? Since the social network generates the vast majority of its profits through advertising, it’s in Meta’s interest to understand the effect those ads are having on the product’s user experience.
“If they start loading people up with too many ads, at some point, they’re going to start to see other metrics changing,” explains Wernerfelt, who worked as a researcher at Meta prior to joining the faculty at Kellogg. “They want to keep tabs on that, so that’s an important reason tech companies create such holdout groups.”
When they ran their study, Wernerfelt and his collaborators (Erik Brynjolfsson of Stanford University, Avinash Collis of Carnegie Mellon University, and Asad Liaqat, Daley Kutzman, Haritz Garro, and Daniel Deisenroth of Meta) recruited a representative sample of 53,166 Facebook users from 13 different countries to participate in their research. A third of those users came from the holdout group with no News Feed ads.
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Each user responded to a survey asking if they’d be willing to accept a certain amount of money (randomly set between $5 and $100) in exchange for deactivating their account for a month. In essence, the survey asked users how much their Facebook experience was worth by asking them how much it would cost to part with it. Users were also told that some respondents would actually receive the dollar offer they’d been given.
As is common in economics research, this last part was done to incentivize truthful responses from users. “If people don’t think the offer is real, they’re more likely to say crazy stuff, and then your data doesn’t mean anything,” says Wernerfelt. “But if I’m like, ‘Look, here’s the prospect of actual money,’ they take it more seriously.”
Cashing out
Among Facebook users who saw a typical number of ads, the median amount they accepted to temporarily quit the service was $31.04. For users in the holdout group—who hadn’t ever seen an ad in their News Feeds—the amount was nearly identical: $31.95. In essence, whether or not a user has ads on Facebook, they tend to value the product the same.
What’s more, the researchers found that this rough equivalence held regardless of what country users were from, how often they tended to spend in a single session, or how long they had been users of Facebook (some as long as nine years).
“We do all this slicing and dicing to show that this result is quite consistent,” Wernerfelt says. “The median valuation for Facebook doesn’t really seem to differ substantially for people who see ads versus those who don’t.”
Rethinking regulation?
As is often the case with surprising findings, the researchers caution against overinterpretation.
“We should be circumspect; this is one setting,” Wernerfelt says. “Extrapolating beyond it to different contexts will of course require assumptions.”
For example, Wernerfelt suspects the findings would change if they were to look at other advertising channels: “The user experience with ads across channels is just very different—compare, for example, how you feel waiting for a poorly targeted TV commercial to end versus scrolling past an ad on X or Pinterest.” With social-media ads like those studied here, it’s possible that people may not mind the ads because of how they are personalized to the interests of each individual, potentially offering them some utility. Or perhaps both the positive and negative effects of ads are simply too small to make a noticeable difference.
On the other hand, businesses can suffer when regulators crack down on ads.
“There is growing evidence that when digital advertising effectiveness falls, firms go out of business and prices go up for consumers,” Wernerfelt adds. “Loosely speaking, if digital ads have all these downstream benefits for firms and consumers, and users seem to not mind them, maybe some of the regulatory zeal against online advertising is misplaced.”