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

WhatsApp is already ubiquitous with US consumers. Now Meta Platforms are more focused on building a foundation for small businesses.

Facebook’s parent company launched WhatsApp Business in 2018 to provide a free and simple tool to help small businesses stay in touch with their customers, allowing them to interact directly, search for products, and track their purchasing interests. provides a way to indicate

Soon, the company will roll out a premium service for small businesses, doubling down on a new advertising format called “click-to-message,” which allows consumers to click on a company’s ad in Facebook and Instagram to initiate a direct conversation. I’m here. That business on Messenger, Instagram, or WhatsApp.

Analysts say these initiatives will allow Meta to increase advertising revenue, remain relevant to small businesses, and generate incremental revenue from the premium services offered.

Maintain more meta universes

Meta (then Facebook) acquired WhatsApp in October 2014 for around $22 billion. Since then, industry watchers have been watching closely for signs of the company’s plans to further monetize its platform. That time may be now.

“If I stay on any of Meta’s properties and use Meta to communicate, ask questions, make purchases, all within the platform, there is no loss of signal and Meta gives brands a return on advertising. “Signal loss is something that has impacted social media companies this year,” said Mark Kelley, managing director and senior equity research analyst at Stifel.

WhatsApp will be the “next chapter” in the company’s history, Meta CEO Mark Zuckerberg recently told CNBC’s Jim Cramer. He said the company’s “strategy over time” is to build a service that serves a wider audience and “increase monetization” once that goal is met. And we’ve done it with Facebook and Instagram. WhatsApp is really going to be the next chapter. Business messaging and commerce is going to be a big thing there,” he said.

This message from Meta comes at a time of transition for the company and growing uncertainty among investors. The company recently reported earnings and revenue misses, predicting two consecutive quarters of declining sales. Meta Platform’s stock has lost almost half its value this year. Mark Zuckerberg is investing heavily in a future where the Metaverse will be the engine of company growth, but is currently in the red. But with his Metaverse bet taking a decade to come to fruition, Meta’s CEO said one of the initiatives he should focus on for growth in the short term is WhatsApp. emphasized.

WhatsApp Business has two components. There is a WhatsApp Business app for small businesses. There is also the WhatsApp Business platform, an API for large enterprises such as banks, airlines, and e-commerce companies. His first 1,000 conversations on the platform each month are free. Companies are then billed per conversation, including all messages delivered in a 24-hour session, based on regional rates.

Free apps allow small businesses to communicate directly with their customers. For example, you can set up an automated message that responds to customers after hours, providing information about your business such as your menu or company location. Businesses can use this to send their customers pictures and descriptions of their products and other information that they may be interested in. It’s currently not possible to pay via WhatsApp, but this is a feature Meta is considering, a company spokesperson said.

Premium features for small businesses (expected to roll out in the coming months) include the ability to manage chats on up to 10 devices and a new customizable WhatsApp click to help businesses engage customers across their online presence. Includes a to chat link. The company said in a blog post.

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

Why Main Street Businesses Are The Focus Of WhatsApp Push

Analysts see a wide range of possibilities. Brian Fitzgerald, Managing Director and Senior Equity Research Analyst at Wells Fargo Securities, said:

Rob Retzlaff, executive director of the Connected Commerce Council, a nonprofit that facilitates access to digital technology for small businesses, said WhatsApp is still a “little-used resource for small businesses” in the U.S., where growth is expected to continue. says there is considerable room for and tools.

That’s what we believe the meta is changing over time. says. We do business every week on WhatsApp, Messenger and Instagram.

The need for free and low-cost digital tools for small businesses is highlighted in a 2021 report from The Connected Commerce Council. According to the report, about 11 million small businesses would have closed all or part of their business without the digital tools that enable them to continue operating.

One of the driving forces behind Meta’s WhatsApp Business is advertising revenue. Sandberg said on the second quarter earnings call. Click-to-Message is “one of the fastest growing ad formats for us,” she added. The company did not disclose how much of its business is from WhatsApp versus Messenger or Instagram.

Business prefers this format [with consumers] On top of that, it also reduces the problems caused by the privacy changes Apple made to its iOS operating system last year.

For example, a customer sees a sneaker retailer’s Facebook ad and connects directly with the company through WhatsApp. “In a world that is trying to do more with less and less data, there are no leaks here. Everything is protected,” Fitzgerald said. [else] People all over the world know that I bought these sneakers, and there is a direct connection between the company and the consumer. ”

Additionally, offering a premium service would allow Meta to increase revenue at least a little, Kelley said.

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

But Geraldine Colocia, community manager at Someone Somewhere, a certified B Corporation that works with hundreds of artisans across Mexico, isn’t sure. She has been using the free version of the app for more than two years now and is considering paying for it, but the decision will change the actual features and pricing, she said. .