Current plans to monetize WhatsApp do not include placing ads directly on the popular platform, sources told TheStreet.
Social media giant Meta Platforms (META) – Get Meta Platforms Inc. Report is going through a very tough time.
The parent company of Facebook, Instagram and WhatsApp, is being mocked and is watching the bond of trust with investors crumble day by day. Meta shares are down 62.3% since January, reflected in a fall in market value of nearly $570 billion.
Blame it on formidable rival TikTok for taking market share in ad revenue and on Apple (AAPL) – Get Apple Inc. Report for limiting Meta’s ability to send targeted ads to iPhone owners using its apps. Apple has indeed changed its privacy policy and now gives its customers control over which apps they want to allow to track their internet habits.
The metaverse, which CEO Mark Zuckerberg has touted as the next big thing, has so far only suffered colossal losses. Zuck and Meta are therefore up against the wall to find growth drivers and appease investors’ loss of patience.
In these columns, we put forward the idea that Meta should monetize WhatsApp by giving advertisers the opportunity to promote their products and services on the messaging platform, which is present in more than 180 countries and has more than 2 billion users.
October 26
WhatsApp is a veritable gold mine we wrote. It’s up to Zuckerberg and Meta to mine it.
Meta has no plans to bring ads on WhatsApp at this time, according to sources familiar with the matter who asked not to be identified in order to speak candidly. The social media giant fears that ads will change the experience of users who are accustomed to a no-ad platform.
But Meta may change its plans in the near future, the sources say. Zuckerberg could discuss the question of WhatsApp monetization during the third quarter earnings’ call on Oct. 26.
WhatsApp had considered, at one time, introducing advertising in the “status” section of the application, and finally abandoned the idea. But it could revive these plans, the sources said.
According to a WhatsApp spokesperson, the platform “is focused on building new features to help businesses maximize the value of its service today and believes the opportunity with business messaging is significant.”
Focus on Messaging
The WhatsApp’s monetization plans currently focus on how to generate revenues around messaging, as consumers shift their communication habits away from legacy channels like phone and email. The platform is therefore working on three opportunities.
The first is to generate indirect revenue from advertising. This program is called Click to WhatsApp business. Small businesses using WhatsApp, as their main client communication channel, have an extra incentive for attracting new customers if they advertise on Facebook and Instagram where a button with the WhatsApp logo is inserted for the client who may be interested in the promotional service or product.
When the user clicks on the button, it puts them directly into a WhatsApp conversation with the merchant. The analogy within Meta is that, Facebook and Instagram are the “store front” while WhatsApp is the “store counter” where you close the deal and pay. Messenger, Meta’s other messaging platform, offers a similar service.
There are currently a little over a million active advertisers for this service. It’s “already a significant revenue opportunity” for WhatsApp, a source said. The majority of these corporate clients are in high-potential markets such as India, Brazil, Indonesia, Mexico and Africa.
However, there is a disadvantage relating to privacy: since the user goes through Facebook and Instagram, Meta collects their data.
The second opportunity is what WhatsApp has also been offering to large companies as an alternative solution to their customer service since 2020. The WhatsApp Business API allows these businesses to integrate WhatsApp chat into their customized websites, offering customized client experiences. Chatbots can respond to basic client requests while humans can take over for more complex queries.
WhatsApp currently charges for each client conversation encompassing all messages exchanged within 24 hours. The service already had 50 million customers in 2020. WhatsApp does not give new figures, but in view of the pandemic, this number must have increased.
Meta is pinning many hopes on this product in order to boost the revenue generated by WhatsApp.
A Monthly Subscription
As a third revenue opportunity, the platform has also been testing a premium service for small businesses for the past 10 days.
This service comes in addition to the WhatsApp Business App, a standalone app launched in 2018, which allows small businesses to showcase their products and services and communicate with customers for free.
The premium service will offer advanced tools to merchants. For example, it will be possible to manage the same WhatsApp account on several devices. In other words, employees of a local nail saloon will be able to chat and manage customer requests via different devices, allowing to distribute requests to multiple employees.
WhatsApp will also offer small businesses the possibility of hosting for them a custom URL, which could serve as their own mini website.
The company is considering charging a “small fee” for the premium service, but has not yet determined the amount which will also depend on the country. Testing of the service and its pricing continues, the sources told TheStreet.
The service will be a monthly subscription.
It is still too early to draw conclusions from the initial feedback. WhatsApp plans to launch the service in 2023, the sources said.
