Saturday 25 November 2017

Facebook's Messenger is right on the money

‘When Facebook bought WhatsApp for around $19bn, Mark Zuckerberg said: 'I don’t think ads are the right way to monetise messaging.' Sure, he was talking about WhatsApp, and it was a few years ago — but it does seem like a change of heart.’
‘When Facebook bought WhatsApp for around $19bn, Mark Zuckerberg said: 'I don’t think ads are the right way to monetise messaging.' Sure, he was talking about WhatsApp, and it was a few years ago — but it does seem like a change of heart.’
Steve Dempsey

Steve Dempsey

In 2012, Facebook publicly warned investors that it wasn't doing so well when it came to mobile revenues. The social network announced that it didn't "directly generate any meaningful revenue from the use of Facebook mobile products" and that its ability to do so successfully was unproven.

Fast-forward four years and Facebook has certainly proved it can tap the mobile goldmine. Mobile advertising revenue accounted for around 80pc of ad revenues for the fourth quarter of 2015, up from 69pc of advertising revenue in the fourth quarter of 2014.

A ruthless focus on following the users away from desktop and onto mobile platforms has been key to this turnaround. But the shift to mobile has brought with it an interesting schism.

On the one hand, there is the feed-based public platform - the Facebook everyone knows and loves - while on the other hand, the likes of WhatsApp and Facebook Messenger are growing in importance. These more private and personal digital products increasingly seem like they're at the cutting edge of the evolution of online communications.

Facebook's messenger app now has over 800 million monthly active users - and the ambition for more. Here's what David Marcus, the head of Messenger said at the turn of the year: "The Messenger team's mission is to make Messenger the best place to communicate with all the people and businesses in the world."

That statement let slip a hint of what's to come for Messenger; or rather the inclusion of the word 'businesses' did. And a leaked document has recently emerged that sheds further light on how Facebook Messenger will be monetised. Apparently, Facebook is set to launch ads in Messenger in Q2 2016.

Businesses will be able to send ads as messages to people who previously initiated a chat thread with them. So voluntarily chatting with businesses will become the Messenger equivalent of opting in for marketing communications. The document recommends that businesses encourage consumers to use Messenger to keep in touch, so they can send them ads when the feature launches.

There's more than a hint of an about-face here. When, in 2014, Facebook bought WhatsApp for around $19bn, Mark Zuckerberg said: "I don't personally think ads are the right way to monetise messaging." Sure, he was talking about WhatsApp, and it was a few years ago - but it does seem like a change of heart.

But the devil may be in the detail. There may be a real or semantic distinction between ads that ruin the flow of personal conversations and the types of marketing communications that are deemed kosher.

Facebook already has a programme called Businesses On Messenger, that allows customers get receipts and chat with customer service reps to change orders. We could be looking at an expansion of this.

Aside from plans to monetise, Facebook Messenger is teeming with innovation. The app has a chat SDK, which allows the creation of bots that can automatically respond to users' messages. This could be the first step in Messenger's transformation into a platform that let users interact with third parties just by chatting. Already, if a location is shared in Facebook Messenger, users can now tap on it and call for an Uber to cab to that destination.

And Facebook is also working on its own personal assistant, called M. It's a human-trained AI that aims to help users with everyday tasks, like booking a table at a restaurant or sending flowers.

And Messenger's evolution isn't just about hi-tech innovation. Others have realised the potential of the platform and are using it to reach audiences in a less public, more immediate manner.

Take Bild, for example. The German tabloid is using Messenger to send updates to private users on Bundesliga transfers and the German version of I'm a Celebrity, Get Me Out of Here (or Das Dschungelcamp as it is known locally).

But perhaps the greatest indication of how Messenger and its ilk are growing in influence is to be found in the new news app from Quartz. The app turns the act of reading the news into a Messenger-like conversation.

"Good morning," it said to me on Thursday morning, then followed that up with: "Brazil's ex-president, Luiz Inacio Lula de Silva, has been formally accused of money-laundering."

The message came with a photo of the former Brazilian premier. I had the options to reply with "tell me more" to find out more about de Silva - or "next" to skip to the next story.

Quartz is trialling news with a chat-app user interface; a bold and unexpected approach for a mobile news product.

If imitation is the sincerest form of flattery, Facebook Messenger and WhatsApp - not to mention other influential chat apps, like WeChat and Line - should be very flattered.

They are creating ecosystems for more than just chatting privately with peers. They are building platforms that have the potential to become huge commercial money-spinners, which can offer services and information via a very basic interface - a conversation.

Sunday Indo Business

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