Facebook’s ‘game plan’ to monetise WhatsApp and Messenger
Messenger now has 700 million users while WhatsApp has 300 million but Facebook CEO Mark Zuckerberg says while the plan is to monetise those services any meaningful revenue is still some way off.
Speaking on an earnings call last night (30 July) following Facebook’s second quarter revenues, Zuckerberg said the company will run the “a similar playbook” to how it built a business out of Facebook. While he said the company was under pressure to “just put banner ads and inorganic content into the experience”, Facebook decided that an “organic interaction” would be better long term.
That involved allowing companies to build free pages on the site and offering analytics on how use of those pages boosted their businesses before offering ads. It will be a similar strategy with its messaging services, with Facebook allowing people to contact businesses organically assuming that will boost revenues “further down the road”.
“Right now some people in WhatsApp use the service in order to message businesses, Messenger is still more people-to people. But the long-term bet is that by enabling people to have good organic interactions with businesses, that will end up being a massive multiplier on the value of monetisation.
“We’d ask for some patience to do this correctly. The game plan will be more similar to what we did in Facebook with news feed,” he explained.
The opportunity in Instagram
While WhatsApp and Messenger monetisation may still be some way off, one business Facebook is ramping up is Instagram. A recent forecast from eMarketer predicted Instagram could generate 10% of Facebook’s revenues by 2017 as it looks to build out its ad business.
Zuckerberg claimed Instagram is becoming the “best place to get a real-time snapshot of the world”, citing moments such as the US presidential campaign trail and NASA’s first shot of Pluto as interesting ways people are using the service.
He also highlighted some “big improvements” to the app including upgraded search and a new trending content feature. That is alongside more ad capabilities including new formats such as carousel ads, direct response, self serve and better targeting.
“Over the coming months, Instagram ads will be available to more advertisers.
“As we ramp Instagram ads, we remain focused on quality and relevance to ensure the best experience for people and the highest performance for marketers.”
Mark Zuckerberg, Facebook CEO
Speaking on the same call, COO Sheryl Sandberg, said that despite the growing interest from brands, Instagram will be “really thoughtful and strategic” in how it ramps up revenue.
“We’re going to continue to focus on the user experience, focus on the community growth and monetisation will follow,” she said.
Facebook’s mobile growth
The results also revealed that Facebook’s mobile revenues now account for 75% of its total business, up from 62% a year ago. Total quarterly revenue was more than $4bn for the first time in Facebook’s history while ad revenues overall were up 43% year on year.
Profit fell 9% to $719m, mainly due to increased investment in R&D and hiring.
In total Facebook now has 1.49 billion users every month, with 1.3 billion of those using it on mobile. Daily active users reached 968 million while Facebook claimed that on average people spend 46 minutes a day on its services, wehter that be Messenger, WhatsApp, Instagram or Facebook itself.
On its own marketing, CFO David Wehner said Facebook will “invest more” in sales and marketing despite it remain flat compared to last quarter.