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Chat-opening ads top $10 billion
A messaging-first world
Brazil and India are two of Meta's most important countries for revenue, and people across Southeast Asia, Latin America, and India mostly use WhatsApp. In many ways they skipped the desktop, skipped mobile, and went straight to a messaging-first world, where commerce happens inside the chat with a local hairdresser or a corner shop.
The ad business
Businesses pay for an ad that starts the thread. Those ads convert at a higher rate and push up the CPMs, and the last number shared was over $10 billion a year, from a year earlier, in a fast-growing business.
Beyond ads
A second line comes from verification. When someone tries to recover an Instagram password, the first attempt is a text over WhatsApp rather than SMS, and businesses pay for that service too. It is a business north of a billion dollars, sold in partnership with carriers around the world.
Charging a cut of local commerce inside the chat, as WeChat does, isn't something Meta does right now.
Why did India skip straight to mobile messaging?
Small businesses in these markets often run a WhatsApp number as their storefront, taking orders and sending photos in the chat. Reliance Jio launched in India in September 2016 with very cheap mobile data and reached 100 million subscribers within about six months, many of them going online for the first time on a phone. WhatsApp announced in February 2020 that it had passed two billion users worldwide.
How does WeChat make money inside chats?
Tencent launched WeChat Pay in 2013, and it spread widely through digital red packets sent during the Lunar New Year of 2014. In January 2017, WeChat added mini programs, apps that run inside the chat app, so shops and services could operate without a separate download. Payments through the app carry merchant fees paid to Tencent.
Why send login codes over WhatsApp?
Text-message codes can be stolen through SIM swapping, where an attacker persuades a phone carrier to move someone's number onto a new SIM card. A WhatsApp message travels over the internet rather than through the carrier's text system. The US Federal Trade Commission has published warnings about SIM swap fraud.
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