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Last week, David Wehner, Facebook’s chief financial officer, revealed the social network is exploring business-to-consumer (B2C) interaction in WhatsApp, the mobile messaging service Facebook purchased for $22 billion in late 2014. His remarks re-ignited interest in the company’s plans for monetizing this popular app, which has shut out brands entirely up to this point and solely generates revenue from a small annual fee.
For Facebook, this move could open a substantial revenue stream as businesses line up to pay for permission to communicate with WhatsApp’s massive, global audience. For marketers, the potential opportunity to build and maintain mobile relationships with customers around the world is undeniably alluring. For consumers, they could stay as informed with the brands they love as they do with their friends and family.
Let’s dive more into the possible impact of what would be a landscape-altering decision.
Why is this shift possible for a service that was said to remain advertising-free?
The future of WhatsApp is being shaped by Facebook’s Businesses on Messenger initiative, which currently functions as a customer service tool to allow brands to inform consumers about order confirmations, shipping updates, and the like. Messenger and WhatsApp are both messaging services at their core and mirror each other in many ways, so it makes sense that B2C strategies being explored on Facebook’s homegrown app would be considered for its acquired app as well.
Like Messenger, WhatsApp would likely introduce permission-based functionality that prevents brands from sending messages without obtaining approval from the consumer. (Businesses using Messenger need consumers to sign up on their website during the checkout process.) As an “over-the-top” messaging service, WhatsApp would be expanding its peer-to-peer messaging model with this opt-in option.
If Messenger’s B2C messaging is any indication, there will continue to be no push (i.e. interruption) advertising in WhatsApp, allowing the app to preserve its “no ads, no games, no gimmicks” mantra. This is why the talk of Facebook backtracking on its claims to keep WhatsApp ad-free is misguided and fails to take into account the nuances of permission-based messaging. I would imagine that WhatsApp users who want to keep their experience brand-free will be able to do so. But the services Facebook could introduce into WhatsApp would add such value that many would opt in to B2C messaging.
What might this entail for marketers?
Although Facebook has yet to reveal the specific mechanics of the solution, we can imagine the company will create a frictionless experience for consumers to quickly and seamlessly opt-in for communications with their favorite brands. Think something similar to the “sign in with Facebook” button that appears on many websites.
One of the most obvious and advantageous opportunities for marketers is WhatsApp’s international user base. WhatsApp is among the primary messaging solutions for many people outside of the U.S., where unlimited messaging programs from the carriers are widely out of reach. And while SMS is a key marketing tool in the U.S., taking SMS internationally in a consistent manner is a complex undertaking. If Facebook opens up WhatsApp to marketers, companies can for the first time start to fully interact with consumers globally and seamlessly. If you are a global brand, or one moving in that direction, this would be an incredible opportunity.
Now, even with global access and less regulation than traditional SMS marketing, marketers should still think carefully about how they take advantage of this technology. The same longtime rules of SMS marketing are still in play. This would be a permission-based solution and should be treated as such. Marketers should be cautious about the timing, content, consistency, and relevancy of their messages.
What type of scenarios can consumers expect?
Wehner said that some of the business functions being tested in Messenger could be replicated in WhatsApp. These could include the customer support functions currently offered on the platform (e.g. requesting a different item, sending a notification when an item is back in stock), as well as collecting customer feedback about the shopping and product experience. Facebook has also introduced P2P payments in Messenger; using WhatsApp to send and receive payments could be very appealing, especially to friends and family living abroad. That functionality could extend to e-commerce and allow consumers to pay for items directly in the app.
Where WhatsApp differs from Messenger is that it is directly tied to your phone number. As such, Facebook may choose to borrow from SMS marketers’ playbooks to differentiate WhatsApp’s B2C messaging from Messenger. Brands could take advantage of proven SMS messaging tactics and create a sweepstakes or prize giveaway; send coupons, offers, and event dates; create text votes, polls, and surveys; and enable sign-ups for loyalty programs. Consumers who have opted in to receive text messages from brands would be accustomed to seeing these interactions, and Facebook could capitalize on that familiarity.
In his remarks last week, Wehner noted that bringing B2C messaging to WhatsApp is “more longer-term than the near-term.” Last month, WhatsApp announced it had 800 million monthly active users, so marketers are hoping that Facebook flips the B2C switch sooner rather than later.
Facebook CEO Mark Zuckerberg has said that the company’s products — WhatsApp, Messenger, Instagram, and so on — need to scale to 1 billion users before they can become meaningful businesses. While that might be true for Facebook, access to WhatsApp would become a meaningful business for mobile marketers immediately.
John Haro is CTO of Vibes, a mobile marketing company. John regularly covers tech trends shaping mobile messaging, mobile wallets, mobile payments, and mobile devices. You can follow him on Twitter at @JohnHaro.
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