What Does The WhatsApp Deal Mean For Brands?
Unless you’ve been hiding under the digital equivalent of a rock, or perhaps living in China, it’s almost certain that you’ve heard by now about Facebook buying mobile messaging app WhatsApp for $19 billion.
There has been a huge amount of discussion and speculation about why Facebook spent more than it cost to put men on the moon to buy a product built off the back of open source software, but as WhatsApp is an ad-free product, it’s more important to think about what broader lessons the purchase has for brands and marketers.
First is the fact that WhatsApp’s founders have always been philosophically opposed to advertising: it was built on a mantra of:
No ads, no games, no gimmicks…
What this highlights is the fact that the attention economy is drying up as the supply of content increases: despite the fact that while people are more and more connected and hardly ever very far from a screen of some sort, they are increasingly harder to touch.
“…attention is a zero sum game; every minute spent in Snapchat or LINE or WhatsApp is a minute not spent in Twitter or Facebook or Instagram.”
Bizarrely, this might actually strengthen the position of big event TV, which will increasingly become the only place you can find large, consolidated audiences.
Obviously though, it will also be more important than ever to ensure that TV ads, along with all communications, are part of a larger social strategy. Or, to put it another way, if the ad stops at 30 seconds, you’ll have wasted your media budget.
Secondly it’s useful to think about the fact that WhatsApp was threatening to join Facebook in the billion user club (though the author probably over-estimates the network effect in mobile). This is important for brands because it illustrates the fact that we are now in an age where developers can and will continue to achieve what VC Ben Evans calls “astonishing scale in a short time.”
Although more than enough has been written about the short life of mobile game Flappy Bird, it does rather hammer home the point.
This ability to create high-engagement at scale at (relatively) low cost suggests a number of options for brands:
- They probably can’t bet big on every new service that comes along in case it doesn’t get that scale
- They can start thinking about trying to create or co-produce similar experiences and products by aligning with, or thinking more like, start-ups
- The mobile media industry might end up looking a lot like the old order, with internet conglomerates owning different services aimed at different audiences: if Facebook is Disney… then Instagram is the Disney Channel (the kids love it!) and WhatsApp is ESPN (everyone loves it!)
The conglomeratisation (for want of a better word) of Facebook should also remind marketers that the WhatsApp purchase is the latest stage of Facebook’s pivot that saw it abandon its efforts to use HTML5 to create one app that would meet all of a user’s needs. That move has seen it launch its own Messenger app, the news-reader Paper and also led to the purchase of Instagram.
By focusing ruthlessly on mobile devices and how people actually use them, it now attracts the majority of its ad revenues from mobile and is well-placed to maintain a position of strength going forward. It is now essential that brands embrace mobility as a core marketing philosophy and ensure that all of their products, services and communications are designed for a world where people typically carry the internet with them wherever they go.
At the start of this post I suggested that people in China might not be aware of the deal. That’s because in the largest internet market in the world, Facebook is banned and WhatsApp is dwarfed by WeChat; KakaoTalk is on 93% of smartphones in South Korea and Line is similarly dominant in Japan. And that’s the last essential lesson — for global brands, it’s important not to get stuck in a US- or European-centric point of view as services that may seem ubiquitous in those markets may not even feature in other places.
We’ll end with the thought that most of these Asian apps are also targeting Western and developing markets, typically use high-profile marketing to drive adoption and are built more like platforms, with stickers, games and advertising. This means this second generation of messaging apps are likely to buy or own even more of the attention economy, making the rest of these lessons even more important to consider for brands who want to play a part in the new world of mobile social.
Social/Communications Map courtesy of Ben Thompson
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