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Teams at Meta have been discussing whether to show ads in WhatsApp for the first time, causing internal controversy, as Facebook’s parent company seeks to monetise the world’s most popular messaging service.
According to three people familiar with the matter, these conversations have explored showing ads in lists of conversations with contacts on the WhatsApp chat screen. No final decisions have been made, they said.
On Friday, WhatsApp head Will Cathcart wrote on X, formerly Twitter: “This @FT story is false. We aren’t doing this.”
However, ahead of this story’s original publication a WhatsApp spokesperson did not dispute that the idea had been discussed. “We can’t account for every conversation someone had in our company but we are not testing this, working on it and it’s not our plan at all,” WhatsApp said.
The issue has triggered debates at a high level within the company, due to concerns it would alienate users, said a person with close knowledge of the discussions.
Two people said that Meta is also deliberating whether to charge a subscription fee to use the app ad-free but many insiders are against the move.
Before WhatsApp was acquired by Facebook for $19bn in 2014, its co-founder Brian Acton had made “No ads! No games! No gimmicks!” a company mantra.
How WhatsApp made money was by charging users $1 to download the app.
And Facebook (said they) supported our mission & vision.
Brian even wrote this famous note: pic.twitter.com/A6ufhkMIuX
— neeraj arora (@neerajarora) May 4, 2022
The discussions to break with that longstanding position, while at an early stage, highlight Meta’s desire to cash in on one of its few platforms that is still devoid of advertising.
Meta has been working to shore up its advertising revenue, which took a hit during a period of macroeconomic uncertainty, amid investor concern over the company’s multibillion-dollar bet on virtual reality and the “metaverse”.
Since it embarked on a “year of efficiency”, slashing tens of thousands of staff, its outlook has improved. In July, it reported its first double-digit revenue growth since 2021, with the vast majority, $31.5bn, coming from advertising in the second quarter.
“There is certainly plenty of opportunity when it comes to advertising on WhatsApp,” said Ed East, chief executive of ad agency Billion Dollar Boy. He said it was an “appealing prospect” for marketers but risks being seen as “intrusive” by users.
WhatsApp, which counts 200mn small businesses among its regular users, has recently tested a feature that allows businesses to send direct marketing messages within WhatsApp to users who have consented to receive them.
The new feature, if launched, would mean all users of WhatsApp are shown ads, which would appear next to chats with friends and relations.
The interface would look similar to how adverts are interspersed among chats in Facebook Messenger and emails on Gmail, said a person with close knowledge of the internal discussions. The ads would not appear within the chat conversations themselves.
Some senior executives are worried that following this model would degrade the experience on WhatsApp and prompt users to ditch the app for other options that are available for free, one person added.
Estimates from mobile app analyst data.ai show that WhatsApp, with its 2.23bn monthly active users, is far more popular than Instagram and Facebook Messenger.
Additional reporting by Hannah Murphy, Daniel Thomas and Chloe Cornish
This article has been updated to incorporate Cathcart’s comments and to correct the spelling of Brian Acton’s name
Read the full article here
