The new Facebook Meta brand logo seen on a smartphone in front of the Facebook, Messenger, Intagram, Whatsapp and Oculus logo shown in this illustrative picture taken on October 28, 2021.
WhatsApp is already very popular with US consumers. Now Meta Platforms is paying more attention to building its small business base.
Facebook’s parent company launched WhatsApp Business in 2018 with simple, free tools to help small businesses stay in touch with customers, offering them a way to interact directly, search for products and indicate purchase interest .
The company will soon roll out a premium service for small businesses, and is doubling down on a newer advertising format called “click-to-message,” which allows consumers to click on a company’s ad within Facebook or Instagram and directly start a conversation with that business on Messenger, Instagram or WhatsApp.
These initiatives offer Meta the ability to increase advertising revenue, remain relevant to small businesses and gain incremental revenue from the premium services offered, analysts said.
Keeping more inside the Meta universe
Meta (then Facebook) bought WhatsApp in October 2014 for about $22 billion. Since then, industry watchers have been watching closely for signs that the company plans to change the platform further. That time may now be coming.
“If I stay on any of the Meta properties and I’m communicating using the Meta, I ask questions, and I buy — all within the platform — there’s no signal loss, and it’s easier for -When you tell the brand its return on advertising. spend,” said Mark Kelley, managing director and senior analyst of equity research at Stifel. This may interest you : Most small business owners don’t count their most valuable assets. “Signal loss is really what’s leaving impact on 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 build services to serve a broad audience and “scale monetization” after achieving that goal. “And we did that with Facebook and Instagram. WhatsApp is really going to be the next chapter, with business and commerce messaging being a big thing there,” he said.
This message from Meta comes at a time of transition for the company and uncertainty among investors. The company recently reported earnings and revenue misses and predicted a second straight quarter of declining sales. Meta Platforms shares have lost roughly half their value this year. Mark Zuckerberg is betting large sums of money, currently at a loss, on a future in which the metaverse will be a growth engine for the company. But with his bet on the metaverse up to ten years before it is realized, the CEO of Meta stressed that in the short term it is WhatsApp that is among the initiatives that one focuses on for growth.
WhatsApp Business has two components. There is the WhatsApp Business app for small businesses. There is also the WhatsApp Business platform, API, for larger businesses such as banks, airlines or e-commerce companies. The first 1,000 conversations on the platform each month are free. After that, businesses are charged 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. They can set up automated messages to respond to customers, after business hours, for example, with information about the business, such as a menu or the location of their company. Businesses can use it to send images and product descriptions to customers as well as other information they may be interested in. At present, there is no ability to pay through WhatsApp, but it is a feature that Meta is considering, said a company spokesperson.
Premium features for small businesses — to be rolled out in the coming months — will include the ability to manage chats on up to 10 devices as well as new customizable WhatsApp click-to-chat links to help businesses attract customers in their online presence, the company said in its blog.
“We think that messaging in general is the future of how people will want to communicate with businesses and vice versa. It’s the fastest and easiest way to get things done,” said the speaker.
Why Main Street business is a focus for the WhatsApp push
Analysts see the potential wide. “Messaging is an international forum that everyone uses on an ongoing basis. On the same subject : Middletown restaurant adopts a take-out-only business model. It’s huge and growing,” said Brian Fitzgerald, managing director and senior equity research analyst at Wells Fargo Securities.
There is considerable room for growth in the United States, 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 the -access of small businesses to digital technologies. and tools.
That’s something that When you see changes over time. “We believe deeply that that behavior will continue to grow worldwide,” said Sheryl Sandberg, the company’s chief operating officer, on its second-quarter earnings call on Dec. 27. ‘ July. The company estimates that one billion users are sending business messages every week on WhatsApp, Messenger and Instagram.
The need for free and low-cost digital tools for small businesses is highlighted by a 2021 report from the Connected Commerce Council. The report noted that approximately 11 million small businesses would have closed all or part of their business if not for digital tools that allow them to continue operating.
One motive 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 growth year over year,” Sandberg said in the second quarter earnings call. Click to message “is one of our fastest growing ad formats for us,” she added. The company does not break down how much of the business comes from WhatsApp versus Messenger or Instagram.
Businesses like this format because it’s “an inexpensive way to interact [with consumers] that feels a little more personal,” Stifel’s Kelley said. In addition, it also alleviates a problem caused by the privacy change that Apple made in its iOS operating system last year.
Say, for example, a customer sees a Facebook ad for a sneaker retailer and connects directly with the business via WhatsApp. “In a world where we’re trying to do more and more with less and less data, there’s no leakage here. Everything is protected,” Fitzgerald said. “No one [else] in the world knows that I bought these sneakers and there is a direct connection between the business and the consumer.”
In addition, by offering premium services, Meta can grow revenue, at least incrementally, 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 when it becomes available because he likes the ability to use it on multiple devices.
But Geraldine Colocia, community manager at Someone Somewhere, a certified B Corporation that collaborates with hundreds of artisans across Mexico, is not sure. She has been using the free version of the app for more than two years, and is considering paying for it, but the decision will revolve around actual features and pricing, she said.