Home Facebook Facebook steps back from the decision to sell ads on WhatsApp

Facebook steps back from the decision to sell ads on WhatsApp

WhatsApp won’t remain Ad-free after all

If you were worried about WhatsApp being flooded with ads like that on Facebook, Messenger, and Instagram, worry no more as recent reports suggest that the company has ditched the idea. Facebook will not go forward with the idea of ads on WhatsApp, not yet.

WhatsApp Acquisition

Facebook bought WhatsApp way back in 2014. It took the company a staggering $19 billion to acquire the cross-platform mobile messaging app. To this day, it remains the biggest ever acquisition by Facebook, while the $2 billion Oculus VR deal ranks 2nd. As you can notice, the difference between the two deals is very huge. So what made WhatsApp worth so much money?

popular global messenger apps - WhatsApp, Facebook Messenger, WeChat, QQ Mobile, Snapchat, Viber, Discord, Telegram
Source: Statista.com

The things to consider here are the user growth rate and the engagement rate of WhatsApp. Back then, it had managed to attract 419 million users in the first four years of its establishment, with 1 million users joining every day. And to complement that, WhatsApp had and still enjoys high rates of engagement. The ratio of the daily active users to monthly active users back then was 70%. Even Mark Zuckerberg acknowledged the fact in a conference call:

“WhatsApp is the only widely used app we’ve ever seen that has more engagement and a higher percentage of people using it daily than Facebook itself.”

Another reason Facebook couldn’t resist bidding for WhatsApp was the company’s messaging app-Messenger, which performed far below the company’s expectations. And the WhatsApp acquisition was intended to change a thing or so. Later, we saw Facebook introduce WhatsApp-inspired features to Messenger, such as the sign-up using phone numbers, which it eventually ditched at the end of 2019.

WhatsApp Marketing Potential and Advertisement Policy

stories ad on whatsapp
Stories-like Ad on Whatsapp

With an overwhelming number of users complemented by massive user growth rates and engagement rates, WhatsApp possesses an unmatched potential for advertisement. And if you consider the huge sum of money invested by Facebook, it would only be logical to think Facebook would want to explore the marketing potential. After all Facebook and Instagram are doing well in terms of advertising. But why haven’t we seen any ads on WhatsApp? Maybe because it was never meant to have any ads. It might also be one of the reasons WhatsApp saw such unprecedented growth. This quote from Jan Koum (the co-founder of WhatsApp) in 2014 makes it even more clear:

Monetization is not going to be a prioritization for us. We are excited by where we are going to be five to 10 years from now. We are focused on growth.

A 2012 post from the official blog titled “Why we don’t sell ads” reads:

Remember, when advertising is involved you the user are the product.

Facebook, WhatsApp: the story of ads

Facebook had earlier announced that it would introduce in-app advertisement in WhatsApp starting from 2020. The announcement came during the 2019 edition of Facebook’s annual Marketing Summit. At that time, Facebook had different ad-types to choose from. However, the most likely one was the Instagram Stories like Status feature. But with the start of the new year, Facebook seems to have dropped the idea (as of now).

According to a report from The Wall Street Journal, Facebook has “disbanded” the team that was working on the idea. Facebook has deleted all the codes introduced to implement the ads. However, it is unclear if Facebook is resting the idea forever or will start on the project from scratch. Personally, the former doesn’t sound practical enough for an investment worth $19 billion. So, WhatsApp will introduce ads but it won’t happen any time soon.