In a seismic shift that could redefine the way users interact with WhatsApp, the world’s most popular messaging service is contemplating the introduction of advertisements within its app. According to insiders familiar with the matter, the teams at Meta, WhatsApp’s parent company, are mulling over the idea of displaying ads alongside conversations on the chat screen.
The Controversial Pivot
The debate within Meta has reached the higher echelons of the company’s hierarchy, given the potential ramifications for user experience. “There are genuine concerns that introducing ads could alienate a large number of users,” said a source close to the ongoing discussions. Notably, before its acquisition by Facebook in 2014 for $19 billion, WhatsApp co-founder Brian Acton had declared, “No ads! No games! No gimmicks!” as a company mantra.
Ad-Free for a Fee?
Adding another layer of complexity, Meta is also considering a subscription model that would allow users to opt for an ad-free experience. However, many within the company oppose this idea, fearing it could further estrange users who have grown accustomed to a no-cost platform.
The Business Viewpoint
Ed East, CEO of ad agency Billion Dollar Boy, finds the prospect “appealing” for marketers, but also acknowledges the risk of it being perceived as “intrusive” by users. WhatsApp already allows 200 million small businesses to send direct marketing messages to consenting users. The proposed change would generalize the presence of ads across all user chats, but without intruding into the conversations themselves.
A Historical Perspective
WhatsApp was founded in 2009 by Yahoo alumni Brian Acton and Jan Koum with the goal of providing a user-friendly, fast, and reliable messaging service free from the distractions of advertising. Post-acquisition by Facebook, however, the monetization strategy underwent a tectonic shift. Despite resistance from its founders—who eventually left the company—WhatsApp gradually incorporated revenue-generating features like WhatsApp Business and Click to WhatsApp ads.
What’s at Stake
The stakes are high for both Meta and WhatsApp. Meta is looking to boost its ad revenue, which has been impacted by macroeconomic uncertainties and hefty investments in virtual reality and the metaverse. On the other hand, WhatsApp, with its staggering 2.23 billion monthly active users, stands to lose a lot if the ad model backfires and users migrate to alternative platforms.
In the Market’s Hands
Ultimately, the success or failure of this new feature will depend on market reception. Existing controversies surrounding user data and privacy could tip the scales. As of now, no final decisions have been made, but the ongoing internal debates indicate that WhatsApp could be at a turning point, leaving its ad-free past behind as it navigates the uncertain waters of advertising.
Update: WhatsApp head Will Cathcart has taken to Twitter to deny the report, saying:
“This @FT story is false. We aren’t doing this.”
This @FT story is false. We aren't doing this.
Also it looks like you misspelled Brian's name… https://t.co/Z47z9FC5yu
— Will Cathcart (@wcathcart) September 15, 2023
It remains to be seen however if there is any fire behind this smoke.