Facebook’s new rebranding logo Meta is seen on smartphone in front of the displayed logo of Facebook, Messenger, Intagram, Whatsapp and Oculus in this illustration image taken on October 28, 2021.
Given Ruvic | Reuters
WhatsApp is already very popular with US consumers. Now, Meta Platforms is paying more attention to building its small business base.
Facebook parent company launched WhatsApp Business in 2018 with free, simple tools to help small businesses stay connected with customers by allowing them to interact directly, search for products, and express interest in buying.
Soon, the company will launch a premium service for small businesses and is ramping up a newer advertising format called “click-to-message,” which allows consumers to click on a business’s ad on Facebook or Instagram and start a conversation directly with that business on Messenger, Instagram or WhatsApp.
These initiatives offer Meta an opportunity to increase ad revenue, stay relevant with small businesses and generate additional revenue from the premium services it offers, analysts said.
Keep more in the meta universe
Meta (then Facebook) bought WhatsApp in October 2014 for around $22 billion. Since then, industry watchers have been watching closely for signs that the company plans to monetize the platform more. That time could come now.
“If I stay on one of the meta objects and communicate, ask questions and buy through meta – all within the platform – there is no signal loss and it is easier for meta to communicate to the brand their return on advertising spend,” said Mark Kelley, Stifel’s Managing Director and Senior Equity Research Analyst, “Loss of signal is really what’s impacted social media companies this year.”
WhatsApp will be the “next chapter” in the company’s history, Meta CEO Mark Zuckerberg recently told CNBC’s Jim Cramer. He noted that the company’s “playbook over time” has been to develop services to serve broad audiences and “scale monetization” after that goal is met. “And that’s what we’ve done with Facebook and Instagram. WhatsApp is really going to be the next chapter, with business messaging and commerce playing a big part there,” he said.
This message from Meta comes at a time of transition for the company and uncertainty among investors. The company recently reported a decline in earnings and sales and forecast a second straight quarter of declining sales. Meta Platforms stock has lost about half of its value this year. Mark Zuckerberg is betting large sums of money on a future where the Metaverse will be a growth driver for the company. But with his bet on the metaverse still a decade away from bearing fruit, the Meta CEO has stressed that in the near term, WhatsApp is one of the initiatives to focus on for growth.
WhatsApp Business consists of two components. For small businesses, there is the WhatsApp Business app. There’s also the WhatsApp Business platform, an API, for larger businesses like banks, airlines, or e-commerce businesses. The first 1,000 conversations on the platform each month are free. After that, businesses are billed per conversation, which includes all messages delivered in a 24-hour session, based on regional rates.
With the free app, small businesses can communicate directly with customers. You can set up automated messages to reply to customers, for example outside of business hours, with information about the store, e.g. B. a menu or the location of your company. Businesses can use it to send product images and descriptions and other information to customers that may interest them. There is currently no option to pay via WhatsApp, but Meta is considering the feature, a company spokesman said.
Premium small business features set to roll out in the coming months include the ability to manage chats on up to 10 devices, as well as new WhatsApp customizable click-to-chat links that businesses can use to reach out to customers through their can attract online presence, the company said in its blog.
“We believe that messaging in general is the future of how people want to communicate with businesses and vice versa. It’s the quickest and easiest way to get things done,” the spokesman said.
Why Main Street Business is a Focus for the WhatsApp Push
Analysts see the broad potential. “Messaging is an international forum that everyone uses all the time. It’s huge and growing,” said Brian Fitzgerald, managing director and senior equity research analyst at Wells Fargo Securities.
There’s significant room for growth in the US, where WhatsApp is still a “largely untapped resource for small businesses,” said Rob Retzlaff, executive director of The Connected Commerce Council, a nonprofit organization that promotes small business access to digital technologies and tools .
That’s something Meta sees changing over time. “We have a strong belief that this behavior will continue to increase around the world,” said Sheryl Sandberg, the company’s chief operating officer, during its second-quarter earnings call on July 27. The company estimates that 1 billion users start a business every week via WhatsApp, Messenger and Instagram.
The need for free and affordable digital tools for small businesses is underscored by a 2021 report from The Connected Commerce Council. The report found that about 11 million small businesses would have shut down all or part of their business if it weren’t for digital tools that allowed them to continue operating.
One driver for Meta in promoting WhatsApp Business is advertising revenue. “Click-to-message is already a multi-billion dollar business for us and we continue to see strong double-digit year-over-year growth,” Sandberg said on the company’s second-quarter earnings call. Click-to-message “is one of our fastest growing advertising formats for us,” she added. The company doesn’t say how much of its business comes from WhatsApp compared to Messenger or Instagram.
Businesses like this format because it’s “a cost-effective way to interact [with consumers] that feels a bit more personal,” said Kelley von Stifel. In addition, it also mitigates a problem caused by the privacy change Apple made to its iOS operating system last year.
Let’s say a customer views a Facebook ad for a sneaker retailer and connects directly with the company via WhatsApp. “In a world where we are trying to do more and more with less and less data, there are no data leaks here. Everything is protected,” Fitzgerald said. “No one [else] The world knows I bought these sneakers and there is a direct connection between businesses and consumers.”
Additionally, by offering premium services, Meta could at least incrementally increase sales, 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 once it’s available because he likes the ability to use it on multiple devices use.
But Geraldine Colocia, community manager at Someone Somewhere, a certified B Corporation that works with hundreds of artisans across Mexico, isn’t sure. She’s been using the free version of the app for more than two years and would consider paying for it, but the decision will impact actual features and pricing, she said.