Sensational headlines like the above have been a common sight of late. The apparent uproar is due to the recent announcement of advertising being introduced on WhatsApp (from 2020). It certainly tells us that receptivity is very much still a key element to be considered by advertisers. However, it may well be the case that the ‘outrage’ is more of a media frenzy then genuine concern from users themselves. Headlines of ‘controversy’ seem to be somewhat disconnected to the views of the average user, who in the main don’t seem particularly surprised or bothered (without prompting).
The subject of advertising on WhatsApp is something that has been bumbling around for many years. How it has taken so long to arrive at the inevitable is more of a surprise than the announcement itself. In terms of commercialisation, WhatsApp is light years behind some other SMS based apps, just take a look at WeChat! And so, the reason for introducing advertising is an obvious one, a heavily used platform with masses of data – getting it right however is a different matter!
But why has it taken so long to arrive at this announcement?
Let’s remind ourselves of the history; WhatsApp was established in 2009 by former Yahoo employees Brian Acton and Jan Koum. From the start WhatsApp had an ingrained and fundamental policy of ‘no ads’ on its platform.
Staying true to its stance towards this it has instead survived through minimal subscription models in some countries. You have to respect the founders for taking such a clear approach and sticking to it ‘a product free from promotions’. Alarm bells should have rung on that front when they sold Whatsapp to Facebook for around $19bn in 2014. To give credit to them the ‘no ads’ stance was still something the duo adhered to after the sale, although with hindsight this may have been a little naïve.
Facebook is of course one half of the infamous digital duopoly and most likely the biggest single ad platform on the planet. At the point of selling to Facebook most people in the industry realised things would change and expected it quicker than it has arrived. After all, Facebook with an estimated $55bn in revenue for 2018 ($25 for each user worldwide) is not in the habit of ignoring glaringly obvious commercial opportunities.
So, this brings us right back to the recent ‘uproar’ around advertising on WhatsApp. Why should it be a concern for users? In actual fact this opens up a wider debate, the debate of why everything is expected for free? The culture of expecting things for free has certainly come from the digital age. Traditional newsbrands for example have struggled to commercialise quality digital content. In comparison to ‘the good old days’ people would pay for a printed publication (to be fair many still do) that was then packed full of paid for ads and no one batted an eyelid . Of course there was ad avoidance & different levels of impact delivered based on creative, size and positioning (think adformat and viewability).
But back to WhatsApp, here is an app used as an essential communication tool by 1.5bn people … for free (mostly). Why do people expect this for free? Providing a service costs money, on the scale of WhatsApp it costs a lot of money. It is a great product, so again I wonder why it is simply expected to be provided to users at no cost?
There are many different models to commercialise in digital. WhatsApp could have gone down any route including simply having the option of a ‘no ads’ paid version (think Spotify). Their decision to opt for an ad funded model makes sense as it is fully in line with their other key platforms Facebook and Instagram. Each model has its challenges, introduce a paid only version and perhaps people would move to other platforms? Introduce an ad funded model that works for them across all their other entities and you could possibly lose a few users? Most users are highly likely to just accept it and forget all about it a week later.
So what will this actually mean? Ultimately it will mean advertising will arrive on WhatsApp and the platform will continue to provide its service at no £ cost to its users. We also already know from the recent F8 facebook conference that ‘living rooms’ are to be the focus as opposed to ‘village squares’ (essentially small closed groups instead of large open groups). WhatsApp certainly fits in to this area of focus. For advertisers this can only represent another great opportunity. Although it will of course need careful consideration and execution due to the more personal nature of WhatsAppp.
Like most people I would like everything for free, but I am happy to pay for what I value. If that is done through viewing ads or sharing my data then all the better. If the ads are tailored, of interest to me and of a suitable creative quality then I’m actually benefiting. Having always been seen as the great untapped opportunity I have been waiting for the chance to run ads on WhatApp for years. Soon, we can finally and intelligently add it to the mix to deliver results for our clients!
This article was written by Mark Smith.