Text / Wang Qian
Source: Zhixiangwang (passagegroup)
Advertising is still a profit model that social media cannot circumvent.
By 2018, WhatsApp was the only instant messaging app in the world with over 1 billion monthly users. Tencent, the king of social networking in China, and its combined monthly users of WeChat and Wechat did not break through this number until the first quarter of this year.
But WhatsApp hasn't really realized yet.
In normal P2P messaging, adding ads between chat conversations can make people feel like spam. WhatsApp is a company that pays close attention to users and seems unlikely to introduce ads there to compromise the P2P messaging experience.
Everything is possible.
In August of this year, WhatsApp announced that it would post ads on its platform via WhatsApp Status, an app that users’ content would disappear after 24 hours, similar to Instagram, Facebook or Snapchat Stories. WhatsApp also said it will launch a corporate API account to help businesses reach customers on WhatsApp and allow businesses to post ads on Facebook to reach customers on WhatsApp. The company hopes to use these three initiatives to promote liquidation.
However, the story of WhatsApp is not just as simple as publishing an ad. The app is considered an anti-advertising app and is replacing text messages that global smartphone users can use to communicate with others.
When Facebook acquired WhatsApp in 2014, it promised that WhatsApp is completely independent. In the early days, WhatsApp launched end-to-end encryption on the platform, which blocked any form of advertising on WhatsApp because the app didn't and couldn't capture any meaningful data to push targeted ads.
However, Facebook later forced WhatsApp to share data with other Facebook products. This dilutes WhatsApp's anti-advertising stance, disappoints and pains the company's founders, and quits. WhatsApp has gradually become a hotbed of fake news, by sharing misinformation, creating lynching mobs and taking the lives of innocent people.
Respecting the conflict between user privacy and the benefits of distributing advertising, and the conflict between connecting users and controlling spam remains an open question for WhatsApp, which may be why it has not been publicly available on the platform. What is the possible realization of the realization plan announced by WhatsApp? What is the chance of success? What are the potential impacts on application users?
WhatsApp's anti-advertising initials
Since its inception, WhatsApp has been known for its open position against advertising. Co-founder Brian Acton hated the ad from the heart and posted a message on the desk of another co-founder and CEO, Jan Koum; no ads, no games, no gimmicks ; the note, as a guideline for WhatsApp.
Before the creation of WhatsApp, both founders worked at Yahoo. Yahoo was a leading technology company at the time, and almost all of the money came from advertising. Acton once said: “I have worked at Yahoo, and there is always a debate about placing more shopping ads on the page. That memory is not good. "
Brian · Acton placed on Jane ·
WhatsApp was originally free on all platforms except iOS, and the lifetime cost of iOS was $1 (and later changed to $1 per year). After being acquired by Facebook, WhatsApp became free on all platforms.
After being acquired by Facebook in February 2014, the founders of WhatsApp also proudly showed “no ads, no games, no gimmicks” and expressed their contempt for advertising business models and user privacy. respect.
As for cashing, Koum wrote an article on the WhatsApp blog exploring the non-advertising revenue model:
“People may want to know how we can maintain WhatsApp operations without receiving a subscription fee. Starting this year, we will test the WhatsApp subscription to the businesses and organizations you want to listen to. This includes communicating with your bank about recent transactions or communicating with airlines about flight delays. We previously got this information via SMS and phone, and we want WhatsApp to do this more easily, while still giving you no third-party advertising and spam experience. "
Based on the emphasis on privacy, WhatsApp even launched end-to-end encryption on the platform in April 2016.
Another mode of realizing the realization of news and social applications is mainly established by Tencent. Tencent has established a super-application ecosystem consisting of taxis, payments, and e-commerce through WeChat. In addition to messaging, Tencent is also one of the world's largest gaming companies, using communications as a social layer to help users discover friends and communities and play games together.
But so far, WhatsApp has never shown the slightest tendency to build such a super-app ecosystem or gaming platform.
How does WhatsApp open its arms to advertising?
When WhatsApp is sold to Facebook, both companies claim that they will not share any data and they will continue to run completely independently.
Even Facebook's CEO Mark · Zuckerberg also said, "I personally think that advertising is not the way to make money. “
However, in April 2017, shortly after WhatsApp implemented end-to-end encryption, Facebook changed its position, forcing WhatsApp users to either share some personal data with Facebook or stop using WhatsApp altogether.
Data sharing includes key data points for mobile phone numbers and certain other features, such as reading recent browsing, device identifiers, operating systems, and the phone number of people who may be chatting. This led to the departure of the two co-founders of WhatsApp, Koum and Acton.
Facebook claims to do this to reduce spam on WhatsApp and improve the user experience by providing better friend suggestions and posting better ads on Facebook.
One possibility is that if A often chats with B on WhatsApp, but A is not a friend of B on Facebook, then A may now appear as a friend on Facebook. Of course, Facebook news can also be improved by prioritizing the content of friends on WhatsApp, as most P2P conversations in emerging markets such as India actually happen on WhatsApp, not Facebook Messenger. Therefore, Facebook may use the WhatsApp conversation to improve friend suggestions and news feedback experiences.
The European Union imposed a fine of $122 million on Facebook because Facebook did not disclose the possibility of such data sharing when it acquired WhatsApp. But from this moment on, Facebook and WhatsApp have become complicity to improve advertising.
At the time of the acquisition, Koum wrote on the company's blog that “…… still no ads interrupt your (WhatsApp users) communication. “Because advertising on WhatsApp Status does not disrupt communication between two users.
At a plenary session with WhatsApp and Facebook employees in April 2018, an employee asked about WhatsApp's advertising program, and Koum first expressed his dislike of advertising. But he added that if advertising is inevitable, putting them in the "state" is the least intrusive way.
But what ultimately defies Facebook's commitment to acquire WhatsApp is not to post ads on the WhatsApp state, but Facebook's core value of compromising the privacy of WhatsApp users by forcing data sharing. Forcing data sharing is critical for Facebook to make more money from WhatsApp, but it also has other implications. Facebook is now familiar with most WhatsApp users, showing them targeted ads in the WhatsApp state, which violates user privacy.
No valid user data,
How do advertising goals run on WhatsApp?
The difficulty with WhatsApp launches is that it is an end-to-end encryption platform. It knows nothing about the content of conversation messages, including voice and video calls, real-time location, or WhatsApp status. Therefore, it knows nothing except the user's mobile number, name (optional), time of last browsing, and the mobile number of the person chatting with it. In addition, it actively chose not to collect GPS locations.
Although WhatsApp has more than 1.5 billion monthly users, launching ads on its platform requires it to solve the basic problems of advertising operations. WhatsApp does not have any targeting information such as age, gender, interests, behavioral data, etc. Ads without any goals can harm the experience of WhatsApp users and waste advertisers’ marketing dollars. For example, showing diaper ads to parents with infants can lead to conversions, but the same ads can be wasted on bachelors or seniors.
Without any valid targeting data, WhatsApp has no choice but to rely on Facebook or Instagram to extract the user's target data for ad serving. Users may use the same mobile number on WhatsApp, Facebook, and Instagram, and WhatsApp can get targeted data from the latter two, both of which have enough data users to run high-quality marketing campaigns. In terms of digital advertising, Facebook Inc.'s market share continues to increase.
However, since this strategy relies on phone numbers, users who want to avoid receiving ads on WhatsApp can choose to delete their phone numbers from Facebook and Instagram, or add different phone numbers to their Facebook and Instagram (in Countries such as India, where people often use dual-card phones, are easy to do.)
Another option might be to use an advertising ID. This is an identifier unique to each mobile device and is provided by the mobile operating system to the Internet advertising player as a public identifier between Facebook applications. Since WhatsApp is a mobile messaging app (visiting the web version requires the WhatsApp mobile app to be active and connected to the internet), and most Facebook and Instagram users can access these services from their mobile phones, common ad IDs are easier to identify The same user in the Facebook application family.
On October 17, in the WhatsApp beta, users were asked to link their WhatsApp account to an Instagram or Facebook account. It is expected that new features can be restored to a person's Facebook account via WhatsApp or automatically share WhatsApp status updates to Instagram and Facebook. The latter eliminates the pain of creating content and manually publishing to multiple Facebook apps. It also helps to post content to Facebook's core products, and now more and more young users are giving up on Facebook.
But at the same time, the link between WhatsApp and Facebook / Instagram accounts can also help solve the problem of ad user targeting.
WhatsApp ads are good and bad
The good news is that the number of users of WhatsApp Status has been increasing. In all Facebook apps, the WhatsApp version of the Stories feature has the highest daily users. Since Facebook expects Stories to soon exceed feed sharing, this foreshadows the realization of WhatsApp.
Google Trends Analysis also proves this
The WhatsApp version of the Stories feature has great use and engagement. However, current Stories ads can be skipped. TechCrunch's Josh Constine wants Facebook apps to implement non-jumpable ads in Stories and monetize them at a high price. Ben Thompson, a well-known technical and strategic writer, has suggested that because Stories leads to higher video content consumption, it is actually an ideal choice for brand advertising, so it is more suitable for Facebook's monetization.
In addition, the main foundations of WhatsApp users are emerging markets such as India, Brazil, Mexico, Indonesia, Russia, and Spain. Advertising revenues in these markets will be lower than those in developed markets such as the US, Germany, and Japan. Although the ads on WhatsApp Status may become long-term winners, the absolute amount of revenue in the short term may be lower.
Other realisation areas
Another way to monetize WhatsApp is the enterprise API account. There is a fee for businesses to send messages to users on WhatsApp. These messages are also end-to-end encrypted. These messages are very expensive compared to the cost of SMS.
Take WhatsApp's largest market in India, for example, where it has 200 million monthly users, and the typical cost of sending a message on WhatsApp is almost seven times the regular SMS cost (0.1 rupees and 0.7 rupees). Despite this, companies still choose WhatsApp because of the high success rate of WhatsApp compared to SMS.
In India, text messages typically have a 50% failure rate due to incorrect numbers. In addition, Indian users often change the number. To make the deal more enjoyable, WhatsApp plans to respond more quickly to corporate customers, offering lower information delivery costs.
Whenever a user makes a transaction on an external service, such as booking a ticket on MakeMyTrip or booking a movie on BookMyShow, after the purchase, the user receives a reservation-related reminder via the "default option to join" option. (You can opt out, but most users usually use the default option.) From a consumer perspective, the benefit is to get ticket or booking details in a richer media format, such as images instead of plain SMS text.
However, the risk of adopting this approach is that it may eventually give users a spam-like experience. Currently, WhatsApp only opens a limited set of businesses for the Corporate Account API, and is currently only open to about 90 to 100 companies in India, such as MakeMyTrip, BookMyShow, and more.
However, because it can be extended to Facebook pages, or self-service ad-like mode like Twitter account self-service mode, WhatsApp users are at high risk of spam. WhatsApp does not actually verify when the user agrees to receive corporate messages, spammers and unscrupulous businesses can continue to create new WhatsApp Enterprise API accounts, send spam on WhatsApp, and create again after being flagged New account. Spam on WhatsApp is even more serious than Facebook or Instagram, because every WhatsApp message is pushed as a notification, which can ruin the user's attention.
To avoid this, WhatsApp can only manually approve corporate API accounts for high-quality businesses. But this may also limit the scale of liquidation.
On Facebook's other messaging app Messenger, businesses can only send messages to users who track them on Messenger. Technically, there is no "spam" If a business account sends too many messages to the user, it is likely to be ignored.
WeChat created two types of business accounts: subscription accounts and service accounts. The subscription account can send a message to the user every day, and all messages from the subscribing account enter a specific sub-category that never sends any notifications or reminders to the user. If the user is explicitly interested in a business, he/she can enter the sub-category and then consume the content sent by the business.
The service account on WeChat can only send one message per week, and these messages will appear in the main message section. The number of service accounts is very limited and the content must be purely transactional. In the subscription and service accounts, if the user replies to the company's information, the company can respond to the user indefinitely within the next 48 hours. However, once the user complains, the account will be blocked soon. In both cases, WeChat does not charge merchants who send information to users, so this does not matter for its realization.
In order to control the messy corporate information in the user's inbox, one might expect WhatsApp to adopt a similar model in the corporate account to push business information to the back office. But it also makes companies question why they pay extra fees to WhatsApp to deliver information.
If WhatsApp is able to manage the SMS inbox (like Microsoft SMS Manager, TrueCaller, PayTM, Hummer, etc.) like some apps in India, it might provide a better experience.
WhatsApp's third monetization initiative is to allow businesses to post ads on Facebook or Instagram and talk to customers on WhatsApp. The commercial communication on Messenger was not successful at first, and Facebook introduced additional chat features for this purpose.
From a consumer perspective, this function of starting a conversation with a company from an ad or company website is theoretically useful, but the revenue of this move should ultimately be attributed to Facebook because the ad is run on a Facebook or Instagram news feed. of.
The problem with this model is that it has the risk of undermining the Facebook advertising model. Once the consumer clicks on the Facebook ad and starts talking to a company on WhatsApp, the company may not advertise on Facebook in the future.