As we all know, WhatsApp is the most popular mobile messaging app in the world. The fast, simple, and free messaging service is used by over 1.5 billion people (in over 180 countries) to communicate with family and friends.
On February 19, 2014, WhatsApp was acquired by Facebook for $19 billion. Even though the social media giant reached deep into its pockets for this acquisition, very little has changed since then – and WhatsApp has actually remained unprofitable since the purchase. Compared to China’s WeChat, (in which users can make payments, book flights/hotels, and more) it seems that no one has really been successful in making money from private messaging.
However, it looks like Facebook plans to change this in the future by introducing various methods to monetize the app. Forbes predicts WhatsApp could make an average revenue of $4/user by 2020, resulting in roughly $5 billion in revenue for Facebook in 2020. This would contribute to about 9–10% of the company’s total revenues. But how exactly will it do that, and how can brands take advantage of this?
In continuing efforts to monetize the app, Facebook has been introducing new features that directly benefit smaller brands and businesses. “It’s important for all the small businesses out there that don’t have a web presence,” Zuckerberg stated. This appears to be aimed at brands based in developing countries, where WhatsApp is incredibly popular. Below, we break down some of the brand-friendly features that are going to be implemented in the near future, or in some cases, are already implemented.
WhatsApp business profiles
WhatsApp Business, released in 2018, is a free app for Android and iPhone. Using the app, businesses can create a branded, verified profile, featuring helpful information for customers such as an email address, business address, and phone numbers. There’s also access to multimedia messaging, free calls, free international messaging, group chats, customizable autoresponders, and user statistics. Zuckerberg says it was specifically built for messaging between small businesses and customers.
WhatsApp product catalog
At Facebook’s annual F8 conference in 2019, WhatsApp Product Catalogue was introduced. This feature allows businesses to create lists of goods and services they are offering and specify product information. WhatsApp users are also able to see the items available for sale from a business on the app.
What was missing from the discussion was whether or not products will be sold directly through WhatsApp. However, Zuckerberg has previously hinted at this possibility by announcing that WhatsApp is testing the ability for users to send money to each other in India. Could one of the possible futures for the app be as an e-commerce platform? Potentially.
Also in 2018, Click-to-WhatsApp ads were introduced. These ads don’t show up on WhatsApp, but rather on a user’s Facebook news feed. When the user clicks on the ad, they are redirected to a conversation thread in WhatsApp where they can immediately start a conversation with a business. These ads are created using Facebook’s native advertising system, Facebook Ads Manager.
WhatsApp status ads
Ads are also coming to directly to WhatsApp. Facebook announced that it would begin showing ads directly in the WhatsApp Status feature, from 2020 onwards. The Status feature on WhatsApp is similar to a story on Instagram or Facebook as an update that lasts for 24 hours. The Status ads will appear between news updates and allow users to swipe up to get more information about the product. These ads will be powered by Facebook Ads Manager and are “going to be the primary monetization model for the company,” Chris Daniels, former WhatsApp Vice President stated. So it appears that WhatsApp’s future could lie in becoming an ad platform, not just an e-commerce platform.
So, in an attempt to increase revenue in times of struggling growth, Facebook has been building out business-friendly features in WhatsApp in order to monetize it. This, along with other developments could see WhatsApp become a new battleground for brands – especially in the developing world. So it’s entirely possible that we’ll see small (and larger) business branch into WhatsApp Business Catalog, news feed ads, stories, and more. My guess is that’ll perform pretty well in the developing world. In other places? Not so much.