WhatsApp is gearing up to finally monetize its messaging app by charging large enterprise businesses for tools to better communicate with customers. WhatsApp will also offer a free app to small-to-medium sized businesses, though it hasn’t outlined the specific functionality of the app. The enterprise solution will allow global companies “to provide customers with useful notifications like flight times, delivery confirmations, and other updates”.
“We do intend on charging businesses in the future,” WhatsApp’s Chief Operating Officer Matt Idema told the Wall Street Journal. “We don’t have the details of monetization figured out.”
The company did write that it wants to facilitate “someone placing an order with a local bakery or looking at new styles from a clothing store” and “shopkeepers who use WhatsApp to stay in touch with hundreds of customers from a single smartphone”, plus offer “an easier way to respond to messages.”
Perhaps WhatsApp could charge enterprises like “airlines, e-commerce sites, and banks” to have multiple representatives managing an account or sending high volumes of messages. It could also charge for artificial intelligence bot functionality or ecommerce transactions.
WhatsApp also officially announced its closed pilot program for verifying business accounts with a green checkmark to distinguish them from personal accounts and fakes.
WhatsApp began testing verified accounts for businesses a week ago. Conversations with businesses are encrypted and they can be blocked. Interestingly, if a business isn’t already in your phone number contacts, its name will appear as whatever they register themselves as instead of their number. This could allow WhatsApp to create a business search engine with optional sponsored results, or let businesses cold-message people, possibly for a fee.
Alternatively, businesses on WhatsApp may need to be contacted by a user first before they can respond with organic or sponsored messages. That’s how Facebook Messenger works, and it’s led to businesses buying “tap-to-message” ads on Facebook’s News Feed to get people to initiate conversations so the business can follow up with sponsored messages. Not allowing cold-message ads meshes with WhatsApp writing that it plans to “make it easier for people to communicate with the businesses they want to reach on WhatsApp”, emphasis mine.
When Facebook acquired WhatsApp for $19 billion in 2014, the companies said they wouldn’t put ads in WhatsApp because it would degrade the experience. But it also ditched its $1 annual subscription fee, leaving few monetization options beyond charging businesses for tools. The introduction of display ads and sponsored messages to Facebook Messenger may indicate a relaxation of WhatsApp’s stance against ads.
With over 1.3 billion monthly users and 1 billion daily users, WhatsApp has reached the massive scale necessary for it to earn significant revenue even from light advertising. Its Snapchat Stories clone WhatsApp Status now has 250 million daily users, and could host vertical video ads between friends’ content the way Instagram does. It could also insert display ads into the inbox like Facebook Messenger.
After being one of tech’s biggest startup acquisitions, WhatsApp has tripled in size under relatively hands-off management by Facebook. Now it’s time to earn its keep.