Meta is now adding ads to WhatsApp, which is an important change for an app whose creators shunned advertising, after Facebook purchased it for $19 billion eleven years ago.
On Monday, Meta revealed that companies may now use WhatsApp to run “status ads,” which encourage users to communicate with the marketers through the messaging functions of the service. Users will only see the advertisements under WhatsApp’s “Updates” page, which will keep the advertising apart from users’ personal conversations. Meta also plans to start charging for subscriptions and search ads on WhatsApp’s Channels service.
The introduction of advertisements on the messaging platform marks a crucial advancement in Meta CEO Mark Zuckerberg’s vision to transform WhatsApp into “the next chapter” of his company’s narrative, as he shared with CNBC’s Jim Cramer in 2022. This initiative to monetize WhatsApp coincides with Meta’s prominent antitrust lawsuit with the Federal Trade Commission regarding the company’s major acquisitions of the messaging service and Instagram.
Currently, Meta permits advertisers to deploy click-to-message ads on Facebook and Instagram, directing users to WhatsApp for direct interaction with businesses. Zuckerberg mentioned to analysts in April that messaging between brands and consumers “should be the next pillar of our business,” noting that WhatsApp boasts over 3 billion monthly users, including “more than 100 million people in the U.S. and growing quickly there.”
Now, businesses can implement these types of ads directly within WhatsApp. The newly introduced status ads are visible in a user’s Updates tab under the “Status” feature, which allows sharing of images, videos, and text that disappear after 24 hours, similar to Instagram Stories.
Since Meta acquired WhatsApp in 2014, the widely-used messaging app has continued to expand globally. However, unlike Facebook, Instagram, and more recently Threads, WhatsApp has never permitted advertising.
WhatsApp’s co-founders, Jan Koum and Brian Acton, openly criticized the advertising sector, and they departed from Facebook after reportedly having disagreements with executives who were keen on introducing advertising and other practices they opposed.
The social media giant does not disclose WhatsApp’s exact revenue figures, but analysts have previously estimated the app’s earnings to range between $500 million and $1 billion from charging businesses for tools and services that enable them to communicate with customers on the platform.
Meta will utilize “very basic information” to suggest which ads to display to WhatsApp users, stated Nikila Srinivasan, Meta’s head of product for business messaging, on Friday. This encompasses details such as a user’s country, city, device, language, and data regarding whom they follow or how they engage with ads.
In June 2023, the company launched WhatsApp’s Updates tab alongside a new Channels feature that enables individuals and organizations to send broadcast messages and updates to their followers, rather than engaging in personal conversations. Meta also announced plans to monetize the Channels feature on Monday.
Channel administrators, both organizations and individuals, will now have the option to invest in boosting the visibility of their Channels when users search for them in a directory, akin to advertisements found in Apple’s and Google’s app stores.
Moreover, channel administrators will have the ability to impose monthly subscription fees on users for access to exclusive updates and content, as mentioned by Meta on Monday. Although the company will not generate immediate revenue from these subscription fees, it intends to eventually take a 10% share of those subscriptions, according to a spokesperson.
Meta aims to minimize disruption to users by confining its new ads to WhatsApp’s Updates tab, Srinivasan explained. Users’ status updates, along with personal messages and calls on WhatsApp, will continue to be encrypted, she added.
“We firmly believe that the Updates tab is the ideal location for these new features,” Srinivasan remarked.
