Why Meta and Mark Zuckerberg are betting big on Whatsapp for business

Facebook Meta’s new rebranding logo is seen on a smartpone in front of the display logos of Facebook, Messenger, Intagram, Whatsapp, and Oculus in this illustration photo taken October 28, 2021.

Dado Ruvic | Reuters

WhatsApp is already widespread with US consumers. The current Meta . Platform is focusing more on building his small business.

Parent company Facebook launched WhatsApp Business in 2018 with simple, free tools to help small businesses stay in touch with customers, providing a way for them to directly interact, search for products, and be able to play. current shopping preferences.

Soon, the company will launch a premium service for small businesses, and it will double down on a newer ad format called “click to message,” which allows consumers to click advertise the company in Facebook or Instagram and directly initiate a conversation with that business on Messenger, Instagram or WhatsApp.

These initiatives give Meta the ability to increase ad revenue, maintain a relevant relationship with small businesses and increase revenue from premium services offered, analysts said. .

Keep more inside the Meta . universe

Meta (then Facebook) bought WhatsApp in October 2014 for about $22 billion. Since then, industry watchers have been closely watching for signs the company plans to monetize the platform more. That hour may be coming.

“If I stay in any of the Meta properties and I’m communicating using Meta, asking questions and making purchases – all within the platform – there’s no signal loss and Meta will easily let the brand know. “The loss of signal is really what’s affecting social media companies,” said Mark Kelley, managing director and senior equity research analyst at Stifel. in this year.”

WhatsApp will be the “next chapter” in the company’s history, Meta CEO Mark Zuckerberg recently said CNBC’s Jim Cramer. He noted that the company’s “timeline strategy” is to build services to serve a wide audience and “scale monetization” once that goal is achieved. “And we’ve done that with Facebook and Instagram. WhatsApp is really going to be the next chapter, with business and commercial messaging being a big thing there,” he said.

This message from Meta comes at a time of corporate transition and uncertainty among investors. Recent company report a missed income and revenue and forecast sales declines for the second straight quarter. Meta Platforms stock has lost about half of its value this year. Mark Zuckerberg is betting big, now at a loss, about a future where the metaverse will be the growth engine for the company. But with bets on the metaverse for more than a decade before results, the CEO of Meta emphasized that in the short term, WhatsApp is one of the initiatives to focus on for growth.

WhatsApp Business has two components. There is a WhatsApp Business app for small businesses. There is also the WhatsApp Business platform, an API, for larger businesses like banks, airlines or e-commerce companies. The first 1,000 chats on the platform per month are free. Businesses are then charged per chat, including all messages sent in a 24-hour session, based on regional rates.

With the free app, small businesses can communicate directly with customers. They can set up automated messages to respond to customers, such as after hours, with business information, such as their menu or company location. Businesses can use it to send images and product descriptions to customers as well as other information they may be interested in. Currently, there’s no ability to pay via WhatsApp, but it’s a feature Meta is looking into, a company spokesperson said.

Small business premium features – to be rolled out in the coming months – will include the ability to manage chats on up to 10 devices as well as customizable WhatsApp chat click-to-chat links. new tweaks to help businesses attract customers through their online presence, the company said in its blog.

“We think messaging in general is the future of how people will want to communicate with businesses and vice versa. It’s the fastest and easiest way to get things done,” the spokesperson said.

Why Main Street business is central to WhatsApp’s push

Analysts see vast potential. “Messaging is an international forum that people use frequently. It’s huge and growing,” said Brian Fitzgerald, managing director and senior equity research analyst at Wells Fargo Securities. .

And tools, says Rob Retzlaff, executive director of the Connected Commerce Council, a nonprofit that encourages small businesses to access digital technology.

It’s something that Meta perceives will change over time. “We deeply believe that behavior will continue to grow around the world,” said Sheryl Sandberg, the company’s chief executive officer, during its second-quarter earnings call on July 27. The company estimates that 1 billion users are messaging with business every week on WhatsApp, Messenger and Instagram.

The need for free and low-cost digital tools for small businesses is highlighted by a 2021 report from the Connected Commerce Council. The report notes that about 11 million small businesses would have to close all or part of their businesses without digital tools that allow them to continue operating.

One driver for Meta in driving WhatsApp Business is advertising revenue. “Click to text is already a multi-billion dollar business for us, and we continue to see strong double-digit growth year-over-year,” Sandberg said on the earnings call. enter the second quarter. Click to text “is one of the fastest growing ad formats for us,” she added. The company does not analyze the percentage of business coming from WhatsApp compared to Messenger or Instagram.

Businesses love this format because it’s “an inexpensive way to interact.” [with consumers] that feels a little more personal,” says Stifel’s Kelley. Plus, it also lessens the pain. issue due to Apple privacy change made for its iOS operating system last year.

For example, let’s say a customer sees a Facebook ad for a sports shoe retailer and connects with the business directly through WhatsApp. “In a world where we’re trying to do more and more with less and less data, there’s no leak here,” says Fitzgerald. “Nobody [else] The world knows I bought these sneakers and there is a direct business-to-consumer connection. ”

Furthermore, by offering premium services, Meta can increase revenue, at least incrementally, Kelley said.

José Montoya Gamboa, owner of Malhaya in Mexico, who has been using the free business app for several years, said he plans to pay for the premium version when it becomes available because he likes the ability to use it. Use it on multiple devices.

But Geraldine Colocia, community manager at Someone Somewhere, a certified B corporation that works with hundreds of artisans across Mexico, is unlikely. She has been using the free version of the app for more than two years and would consider paying for it, but decided to enable the actual features and the price, she said.

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