Ever since Facebook CEO, Mark Zuckerberg acquired WhatsApp, the company has been trying to get a return on their humungous $19 billion investment. As a first step towards doing this, a lot of new businesses have been invited to reach out to their customer on the world’s most popular messaging platform and make them aware of their offerings, for the medium is as ubiquitous as they can get.
Facebook is not looking to rush this at all and are taking their time to make sure that they don’t leave any loose ends. Businesses have been asked to register for taking part in the next phase which is perhaps the most important one as it will form the basis for the final output which will be rolled out at a large scale. The conversation between the business and the customer will be triggered by the latter by sending a message or making an inquiry. The messages will be end-to-end encrypted like all other WhatsApp messages. The consumer can also reach out to a partner company through a Facebook ad which opens up a lot of opportunities for businesses as well as the customers through what Facebook termed as WhatsApp Business API.
A select few businesses like Uber and Wish are already a part of the testing phase. The businesses can send free messages to users on the platform within a day of the chat being initiated and will have to pay for “certain messages” thereafter. WhatsApp users can choose to block the business with the simple tap of a button, something which will prevent spamming from the business and convenience to the consumer. All this is part of a larger goal to make WhatsApp a revenue-generating entity for Facebook. So far, the only monetary gains from the acquisition of the messaging platform were the meagerly fees from the annual subscription from users, way back in 2014.
The original idea behind the acquisition was to eliminate the threat posed by WhatsApp as a networking platform but going by the recent efforts of Facebook, it wants much more from the platform now that it owns it. The direction is in stark contrast to what the creators of the app, Jan Koum, and Brian Acton, had in mind and both of them made it very clear that they didn’t want any advertisers on the app. But things have clearly changed since both the founders exited the company last year. Acton even went on to make an aggressive statement against the application earlier this year on Twitter, asking his followers to uninstall it at once.
Privacy issues have been surrounding Facebook in the recent past far more often than they would like. The Cambridge Analytica scandal has made the users very skeptic about any development in the applications which allows their personal information to be misused or sold for a profit. Owing to this, both Facebook and WhatsApp had to be very careful everything they said during the conference on Wednesday to prevent any backlash from its userbase. But these developments are the need of the hour as the company’s user growth has been slow in recent times. Their stock price also took a dip of $119 billion, the 3rd highest valuation fall in U.S. stock market history. This makes it even more important for them to explore avenues for increasing revenue as soon as possible.
However, in their statement, Facebook only teased the notion of advertising on WhatsApp. For now, anything sent by the businesses will be restricted to “non-promotional content” such as “shipping confirmations, appointment reminders or event tickets,” which aligns with the company’s original vision of not putting out advertisements on the app, according to Facebook’s blog post regarding the same.
The blog did, however, highlighted the potential of the advertisement route if it were to be pursued. Sales Stock, an Indonesian e-commerce company and one of the few companies that were a beta user, attested to the fact that there are a lot of possibilities further down the road for businesses and consumers alike, if the platform was used for advertising. The company sent product recommendations to WhatsApp users. Wahyu Saputra, Sales Stock’s Head of Product, was very optimistic about the proposition. It is highly likely that other businesses will echo the same sentiments
But Facebook has to be cautious about how they go about bringing this idea to life. For a company that is renowned for making rapid strides in whichever direction they choose to go and changing the landscape ever so quickly, it is going to be hard to stay patient. But that is the biggest hurdle they have to cross in order to make this a success. WhatsApp users have always used the platform as a tool to interact with their loved ones and professional acquaintances. A sudden inflow of advertisements could drive users away from the platform and that is definitely something Facebook will try to avoid at all costs.
WhatsApp has to be a source of revenue for Facebook and advertisements are surely the way to do it, but the shift has to be gradual wherein users are eased into the process. With a userbase of over a billion and a half, which is still growing, careful planning and timely execution could be the difference between a masterstroke and a disaster. It will be interesting to see which one it is. One has to put their bet on Facebook as they are the world’s largest social network. You don’t get that every day.