Last week saw a huge development in the world of social media when the social media giant Facebook acquired the mobile messaging mammoth WhatsApp for a whopping $19 billion.
But it leaves a big question mark on how this will impact the digital world. What does it mean for marketers? What changes can we expect as users?
We reached out to social media thought leaders and industry experts to get their opinion on what does this acquisition mean for marketers. Lets have a look:
Karthik Srinivasan – National Lead at Social@Ogilvy
Facebook is a web company, launched much before the mobile revolution started. And it has now realized that user attention is far more prevalent in the mobile platform than on the PC web. So, Facebook is looking at ways to go mobile with a vengeance. First Instagram and now WhatsApp – both are essentially mobile by DNA, unlike Facebook. In fact, post acquisition, more than Facebook becoming a lot more mobile centric (despite the launch of facebook paper), there are signs of the platform making its acquisitions more web! Instagram pages is one example, though Instagram stays exactly the same, beyond changes in ToS to reflect the new owner.
With WhatsApp, I believe Facebook is looking at 2 things – one, consolidating its position as the owner of the most engaging mobile apps and two, acquire the source of a lot of future active mobile users outside the US. I doubt if we’ll see any major changes in WhatsApp as an app anytime soon, but the combined user base of Facebook, Instagram and WhatsApp, together with what they do on the web, PC and mobile is a phenomenally rich source of big data that Facebook can slice and dice to identify better target users for brands and marketers, and hence offer more precise and targeted advertising. How that advertising will be served and how effective it will be is a moot point, though.
Ekalavya Bhattacharya – Digital Head at MTV India
I don’t expect any changes in the WhatsApp product. I. E. In terms of ads coming in. Personally I’ve always been a fan of WhatsApp. The acquisition cost is the shock, but then a lot of it is Facebook stock.
Facebook acquired Beluga and then extended that to the Facebook messenger and one has seen considerable improvement. Probably we’ll see improvement at a product level in both.
The question of monetization will still linger on. Honestly speaking I won’t mind spending a dollar per month on WhatsApp. Once 20% of your users start paying you on a monthly level, that’s when it will all make business sense.
Aditya Pawan – National Digital Manager at Red Bull India
In my view, besides search, instant messaging has always been among the most attractive digital product for consumers – starting with Yahoo! Messenger and moving to Gtalk in the PC era and now with WhatsApp in the multi-device era. Every web giant worth its salt has given instant messaging a serious shot, be it Google, Yahoo!, AOL, Microsoft, etc. for one and one reason alone – stickiness. This is where consumers like coming back and spending their time. This is where consumers connect with their innermost networks. This is where genuine sharing, both of information and of ideas, takes place. No wonder Facebook, after multiple attempts at refining its own messaging product, decided to bet big with WhatsApp.
I believe this deal should come in as a major pat on the back for startups doing their core proposition right and not falling for the easy monetization bait. The fact that WhatsApp stayed true to its original product promise and in the process, garnered the mind boggling following it has, easily makes this a great case study for credible, long-term propositions!
In terms of WhatsApp the product, though change now becomes inevitable, I’m willing to bet on no immediate change for consumers. If anything, the product subscription charges may go away completely. Facebook will almost certainly add WhatsApp’s user data to its data pool and use it towards enhanced personalization for its mobile and web offerings.
Preetham Venky, Business Head – Asia at KRDS
Facebook’s acquisition of WhatsApp isn’t really an acquisition but a marraige. As I write this, Facebook’s market valuation is at 169 billion dollars, which means they paid a little under 10% to acquire WhatsApp. No chump change. The acquisition has married the two companies and they’ll have to chart the future together. With Koum joining the Facebook board, Jan will play an important role in leading Facebook’s strategy on mobile. A much needed shot in the arm for the Goliath.
Also, with this acquisition, Facebook is slowly (and steadily) heading towards becoming a suite of products. With WhatsApp daily active usage at 73% of its 450 million user base, I’m inclined to believe that it’s slightly undervalued. But this is a brilliant move by Mark. He buys a company which could easily have become their greatest adversary.
So, what about monetization you ask. Well, early days, but here are two hints: In App purchases and Product Pivot.
Haroon Bijli – General Manager of Digital Marketing at a leading MNC
WhatsApp is extremely popular with a whole range of users – right from senior professionals to teenagers. It is interesting how WhatsApp has captured the imagination and loyalty of the not-so-apparent user – I know grandmothers who use it to communicate with relatives, and it is probably the most widely used group chat service by school moms and parents. Businesses have so far been late to the game, mostly because it is based on peer-to-peer connect and is not scalable at a mass level. However, we have seen that brands are talked about in WhatsApp and the works – flaming, recommendations, rants, help, self-organization, et al happen on WhatsApp as much as they do on Facebook or Twitter.
I’m sure digital marketers are thinking about the implication of this deal – will Facebook page updates be available to their fan base via WhatsApp? Can Facebook ads be delivered to WhatsApp users too? That’s an exciting proposition if you are a marketer.
As a user, you would have privacy and intrusion concerns when a takeover of this magnitude happens. After all, we’re talking of millions of phone numbers. Would users be happy with the possibility of these being accessible to Facebook and thereby advertisers? It would be interesting to see how it all unfolds.
Adhvith Dhuddu – Cofounder at Alive Now
I recently spoke at Social Media Week regarding the importance of mobile in digital marketing. More users are accessing social platforms via mobile. So every campaign we do on digital needs a mobile element in it. Brands can now start looking at WhatsApp as a marketing tool and to interesting stuff. For example, there is one retailer we are working with to roll out exclusive WhatsApp offers where an update is made on Facebook and you send that message via WhatsApp to your group and by flashing that message at the cash counter, they can avail an exclusive WhatsApp offer. So agencies should think of interesting and out of the box ideas to see how they can integrate WhatsApp in social and digital campaigns without being too intrusive and annoying.
It’ll be interesting to see how WhatsApp integrates with Facebook. One immediate use I can see is the ability to update your Facebook status via WhatsApp if you want, hence giving more users easier and faster access to Facebook. I don’t know if WhatsApp brand groups or brand pages are a good idea? If that’s done it can be quite a useful customer service tool.
Zafar Rais – Founder & CEO at Mindshift Interactive
The WhatsApp acquisition will help Facebook more strategically than monetarily. Facebook has worked towards gaining foothold in the mobile space for long now and this gives them a drastic jump over other players in the market. WhatsApp offers outreach irrespective of demographics or age, taking Facebook into rural areas of India too and increasing marketing potential exponentially.
As a marketer, the acquisition is great news as WhatsApp is a platform many are trying to explore marketing opportunities on; especially after owning a large database of customer numbers.
While there will be some reservations on using Whatsapp as a marketing tool by Facebook, it seems inevitable and users may learn to accept it in exchange for a possibly free & superb user experience.
Varun Duggirala – Left Brain at The Glitch
The acquisition clearly shows that the future of social is going to move away from open social platforms. From a time when everything was public the need is moving towards having private networks to communicate and interact with specific sets of people. It also clearly highlights the need to have multiple products aimed at the future, which Facebook seems to have a great pulse on.
On the marketing front , this will definitely build an interesting gateway to have consumers converse privately with brands & set a new paradigm interms of brand-consumer equations. Also, I’m sure it will build a differential chunk of data for advertisers to utilize and build , I just hope it doesn’t mean spam.
Ahmed Naqvi – Cofounder at Gozoop
With access to over 450 million phone numbers and tons of behavioral data about conversations, statuses and location – Whatsapp offers Facebook a direct gateway into the offline world. It’s a fantastic opportunity to make their targeted advertising even more specific and enable development of new mobile advertising products. It will be very interesting to see how long Whatsapp holds true to their mantra of – No ads. No games. No gimmicks.
Tripti Lochan – CEO at VML Qais Asia
The last 12 months have seen so many changes, which all clearly explain this bold, but survival-necessary, move by Facebook. For the first time in the last 12 months, smartphone sales overtook feature phones. Globally, mobile subscribers reached 7 billion – the growth coming largely from emerging markets.
WhatsApp was the perfect choice across emerging markets, since its other competitors are more localised. With this acquisition, Facebook has clearly laid its claim in the mobile space.
With reference to Facebook making changes in Whatsapp, I believe that Facebook is going to leave WhatsApp ad-free and not worry about monetisation right now. Not even the subscription fee that is currently being charged in some markets. The holy grail is going to be reaching the 1BN users mark, and the 2BN, and the 5 BN. But how they will integrate WhatsApp into their main product strategy and how they will monetize this asset is still a big question – perhaps even in the strategy rooms at Facebook.
Chetan Asher – CEO at Tonic Media
Facebook’s acquisition of WhatsApp probably was to acquire width and establish a communication pipe with the massive user base. We may also see some Facebook products like messenger may get replaced with WhatsApp and will offer users one unified messaging app across its portfolio.
Acquisition may not lead to Facebook turning around the model and pushing ads on WhatsApp, but will help it mine user data to serve better contextual advertising on Facebook, Instagram and Paper.
The depth of information from all these products will help the social network consolidate its position.
Additionally, both these platforms may come together to take social amplification to next level. Both these platforms have individual strengths and also distinct user groups. Facebook may start allowing users to share content that they consume on Facebook to their WhatsApp contacts.
This may give a boost to content discovery via Facebook and open up a huge amplification channel. It will be interesting to see if branded groups will be enabled on WhatsApp, which would be extension of Facebook pages. Brands will have a choice of posting their updates to both pages and branded groups.
Your users decide what is popular, what is widely held, and what grabs their attention.
Therefore, brands ought to find new ways and means to tap into the latest trends of the market. As marketers, we should continuously experiment with different platforms and stay relevant to our audience.
Don’t forget, today’s communication tools are tomorrow’s advertising platforms.
What is your opinion about Facebook’s acquisition of Whatsapp? Share with us in the comments below.