I don’t personally think ads are the perfect way to monetize messaging services…Our goal for Facebook over the next few years is to deliver a selection of mobile products. WhatsApp fits this vision perfectly. It’s the only widely used app we’ve ever seen that has more engagement and a higher percentage of people using it daily than Facebook itself.
Those were just some of the words we heard from Mark Zuckerberg last year after Facebook purchased WhatsApp for an astounding, and unheard of $19 billion acquisition. The most surprising of them, highlight the then opinion of the Facebook founder and CEO’s opinion that advertisements were not the optimal manner in which the company could capitalize on their leading mobile product.
How does Facebook plan to monetize WhatsApp then, if not via ads? First of all, none of us should be worried about Facebook – their financial situation is just fine. However, we’d like to take you into a short glimpse into 5 ways we think Facebook can monetize WhatsApp – when the time is right.
There are some that believe that increasing the price of subscriptions and ensuring that everyone pays the $1 fee is the most basic and simplistic form of monetizing WhatsApp. That however, is unlikely to happen. Facebook CTO David Ebersman said after the acquisition:
The primary thing we focused on is how healthy the network is and how fast it’s growing.
Now, we do understand that growth is not going to grow exponentially and infinitely year after year, however the “internet market”, has yet to hit its peak, and hence deciding to go the route of paying to use the app, would stunt growth once internet reaches more underdeveloped regions. Let’s not forget, WhatsApp is not backed by game-changing technology. Tomorrow another one or two messaging apps could arise and bite into the market – that bite would be bigger for those of us willing to skip apps for the ability to use it for free.
The most logical move would be to add new features – calls, video calls, location-based messages, more emoticons, sophisticated group messaging, and more – and create packages or per/use payment deals.
Ever used Waze? When you are near certain businesses an advertisement for that business pops up to get your attention. This is the advertising move that is perfect for WhatsApp. WhatsApp is mobile with us everywhere we go, from school, work, shopping, and eating to traveling. Adding advertisements that could jump to the corner of our screens (exclamation point) or a message inside of WhatsApp similar to normal text messages from advertisers could incentive use and create a win-win-win relationship for Facebook, advertisers, and users.
WhatsApp and E-Commerce
By enabling in-app purchases, either for messaging or feature add-on’s (a bit different from paying for new features), or by allowing businesses to actually sell within the app, and thus adding an e-commerce side to the messaging app, Facebook could become quote the money-maker. The company could add an e-store inside of the app that offers a location-based catalog based on a unique Facebook-payment system – the sky is the limit.
Take for example, two women discussing a certain garment. Instead of taking pictures from the store and sending or some other form of communication, one could just check it out inside the app. On the other hand, you could have a group trying to decide what they are going to buy as a gift for a friend. The conversation can drag on and on, without a decision. By adding a “voting/poll” feature, the group admin could put the the products to vote inside of the group, and purchase on the spot.
People spend so much time on WhatsApp it seems that it would be a shame to not enable us all to partake in one of our favorite past-times in the app – shopping. Why not use WhatsApp to expand on what is already the largest social media network?
Page B2C Messaging
Every business has a Facebook page. Why not let businesses interact with their community in an even faster and more personal medium? Imagine being in the “Nike” Facebook Page WhatsApp Group, and being able to interact with different agents from different divisions of the company. This would bring “engaging” your community a new meaning, and this could potentially put quite the hit on Twitter, and potentially Apple too (that’d be a double/triple-win for Facebook, no?). Where does Facebook make cash off of this feature? It’s a paid add-on to pages. It’d be hard to imagine many companies turning down another opportunity to get “in-bed” with consumers.
If Facebook were to add the in-app purchases from 3rd parties to the app, this would be the ideal spot, as the admin for Nike could offer limited-time specials for in-app purchases, and Facebook could take their cut.
Social media, in large due to our Facebook culture, has turned into the center of a large portion of our lives. Anything or anyone that wants to get attention and create a buzz knows that the most basic step is to engage and interact with others. B2C messaging could lead to a redefinition of the way we do social.
Not likely but…
Mobile Usage Plans
None of us are big fans of At&T, Verizon, or any other mobile carriers. In fact, we are pretty disgusted by them. Anything that resembles Comcast and net-neutrality is not something consumers want on their plate. With Facebook capabilities, cutting out middle men and using the web to make it cheaper (and much more contract-free) to make phone calls could be the alternative route that the consumers need and make Facebook very profitable (hello Apple). However, that just is not Facebook’s bread & butter, therefore the likelihood of this coming to fruition is close to zero – at least at this point. Maybe someone with insider information can correct us on that…everything we do over our phone could happen via a stronger WhatsApp that thrives on a fast internet connection.
A lot of our ideas have to do with Facebook reviving and revolutionizing the current WhatsApp, but that is on par with what many companies do with their acquisition. What do you think would be the smartest way to monetize WhatsApp? We don’t think that the time has come, but 2016 is just a step away and at that time share-holders will want to start seeing an ROI on WhatsApp.