Meta earns almost all of its money through advertising. But you are trying a different approach with the WhatsApp drive.
The world’s most popular messaging service is more aggressively pushing customer service features, including a pay-per-message option for businesses, and says it’s focusing on business tools, not advertising. WhatsApp halted targeted advertising plans late last year, shocking those who thought it would toe the line of its parent company.
“Our focus has been on business messaging products,” says Matt Idema, WhatsApp’s chief operating officer. He announced that WhatsApp will still display ads within Status, an in-app feature similar to Facebook Stories, at some point.
Two years ago, WhatsApp released an update aimed at businesses using its API, the software interface that allows businesses to manage message threads with their customers outside of the app, such as through a third-party control panel. The app charges some businesses a small fee (a few cents per message) to send users things like receipts and confirmation reminders through the app instead of email.
WhatsApp will now offer more including free storage to host a company’s messages, in the hope that more of them will sign up for the API. Idema says that 175 million of WhatsApp’s more than 2 billion users interact with a business on the app every day, a sign that WhatsApp is focusing on a feature that matters to people. Tens of thousands of businesses use the API, Idema said, although Facebook does not disclose WhatsApp revenue.
Part of WhatsApp’s appeal has been its high level of encryption, which means messages are typically never stored on Facebook’s servers or read by the company. By offering to store commercial messages upon request, WhatsApp is also committing not to use them to reinforce ad targeting, a spokesperson says.
Meta has been working for years to find a way to turn its incredibly popular messaging apps into a profitable business. A few years ago, the company aggressively pushed automated messaging bots in Messenger, its other standalone chat app, but that use case never really took off. It also places ads within Messenger, though analysts don’t see that as a significant part of Meta’s revenue.
The new plan is a combination of trading and customer service. Charging companies to send messages through the API is the only way WhatsApp makes money today. But Facebook has invested in a number of international companies, including Jio Platforms in India, to secure partners for WhatsApp as it builds business and commercial features in those markets. In India, for example, many small business owners use WhatsApp instead of a website and rely on the service to engage with customers and display product catalogues.
WhatsApp is also trying to expand that functionality. Retailers can now promote a Facebook store on WhatsApp, a product catalog that works across all company apps, including Instagram. Idema sees Shops as a sort of graduation from WhatsApp’s existing catalogs feature, saying it will allow retailers to run a digital store from all Facebook apps rather than just WhatsApp.
The next phase of WhatsApp’s plan will also include payments, allowing customers to purchase products directly within the app. Those plans have run into regulatory hurdles in several countries, including India and Brazil, WhatsApp’s biggest markets, adding to the complexity of making money through private messages.
