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WhatsApp is exploring a new feature that would display adverts in the app for the first time, a move that has caused internal controversy, as parent company Meta seeks to monetise the world’s most popular messaging service.
Teams at Meta have been discussing whether to show ads in lists of conversations with contacts on the WhatsApp chat screen, but no final decisions have been made, according to three people familiar with the matter.
However, the concept has been debated at a high level within the company, due to concerns it would alienate users, said a person with close knowledge of the discussions.
Two of these 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 Action 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.
WhatsApp said: “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.”
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
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