WhatsApp Monetization: Non-Intrusive Advertising on a Personal Platform

August 31, 2018 Jonathan Katz

WhatsApp Monetization: Non-Intrusive Advertising on a Personal Platform

What is WhatsApp?

WhatsApp is a cross-platform messaging app available for desktop and mobile. It allows for one-on-one and group messaging, video calls, phone calls, multimedia messages, document sharing and voice messages.

Founded in 2011, WhatsApp was purchased by Facebook in 2014 for $19 billion. Under its parent company, WhatsApp released many updates and improvements, which includes WhatsApp Status, a 24-hour posting feature, and WhatsApp Business.

What is WhatsApp Business?

Earlier this year, WhatsApp created their WhatsApp Business app, which is essentially a constituent relationship management (CRM) software tool and is available exclusively on Android, which allows small businesses to create profiles and interact with potential consumers. The WhatsApp Business app already has 3 million users.

How is WhatsApp monetizing the Business app?

The WhatsApp messaging system, with 1.5 billion users worldwide and 22 million in the U.S., drives over 60 billion messages per day and currently generates no revenue, is looking to monetize their CRM platform for businesses, specifically the messaging capability. In other words, businesses will need to pay a fee to interact with WhatsApp users.

WhatsApp is now looking to expand their business app to mid-size and larger businesses and monetize consumer communication. If a user initiates the conversation by clicking on an ad, the businesses have a 24-hour grace period during which they can interact with the consumer for free. After the first 24 hours, businesses will be charged for interaction.

How is WhatsApp monetizing the Business app

Photo from WhatsApp.com

Facebook built the monetization of the WhatsApp platform this way in an effort to create a positive user experience by allowing consumers to reach out to businesses directly and not vice versa. Implementing a fee for interactions longer than 24 hours also encourages businesses to respond promptly, providing a better experience for consumers.

With user experience in mind, WhatsApp aims not to lose daily active users (DAUs) while monetizing the platform. However, it’s important to note that charging for messaging after 24 hours could deter some businesses from responding to consumers if they deem WhatsApp consumers non-profitable.

WhatsApp Ads on Facebook

WhatsApp also created “click to WhatsApp” ads, with functionality similar to a click-to-call button, that will appear on Facebook, spreading the potential for revenue across multiple platforms. A business can create a “click to WhatsApp” Facebook ad with a button for users to initiate conversation on the WhatsApp platform.

WhatsApp Monetization: Non-Intrusive Advertising on a Personal Platform

WhatsApp Ads directly on the app

WhatsApp also announced they will be selling advertising space within their WhatsApp Status feature. Status ads can feature text and photo or video content, adding an additional revenue stream to the platform.

How Will the Experience Change for WhatsApp users?

Users will need to start the conversation with a business, which can be done through “click to WhatsApp” ads.

Because consumers have control of the business-to-consumer communication, businesses on the platform don’t have the ability to spam messages and clog inboxes with promotional content. Instead, users will see businesses’ presences on the platform in the form of ads in between WhatsApp Status updates.

As the Facebook brand acquires and monetizes more social platforms, stringing users from one to the other, Facebook could spin an advertising web, holding more power in the digital marketing world. For now, Facebook, Instagram and WhatsApp are growing in terms of connecting consumers with relevant businesses and vice versa to produce revenue and expand the Facebook brand.

 

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About the Author

Jonathan Katz

Jonathan Katz is the Chief Media and Product Officer of Digital Media Solutions, LLC (DMS), an industry leader in the world of customer acquisition and retention that helps clients maximize their digital marketing to beat the competition and accelerate growth. In this role, Jonathan provides technical direction across the company in areas of marketing automation, machine language learning, architectures and software technology. He leads the team that works across the firm’s diverse set of divisions to drive new product innovation and strategic positioning. Jonathan also leads customer acquisition teams across all media channels. Since its inception, DMS has evolved into an award-winning, full-service performance marketing company demonstrating incredible year-over-year growth which has earned recognition on the Inc. 5000 list in 2014, 2015, 2016 and 2017. An experienced serial entrepreneur in mobile and digital marketing, Jonathan’s expertise consists of an extremely proven track record in search, social and programmatic media. With his 20+ year career scaling start-ups and brands across health insurance, government services, automotive, careers, education, consumer finance and politics, Jonathan is now charting a new path via artificial intelligence marketing in performance media that will revolutionize the industry. Jonathan studied computer science at Florida State University and lives in Clearwater Beach, FL.

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