I spent time this past weekend playing games with my kids using the Meta Quest VR headsets. I look forward to the day when their cousins across the country get older and join us so that we can play immersive games together. It will be an excellent way to build relationships with family members that are a few thousand miles away.
That’s why I’m bullish on Meta’s future in the metaverse. But as Mark Zuckerberg has said, the metaverse is still years away.
So, for the near term, Meta’s opportunity is in messaging.
Messaging’s untapped potential
Whether it’s answering a question from someone 10 time zones ahead of me or greenlighting a contract across the world, messaging is a fast, easy and usable communications tool.
But as useful as it is for peer communication, its real value will be in customer service. The ability to have a single thread following one’s entire communication with a service provider makes it easier to track history.
How many times have you called a vendor to demand something that was promised on the phone or in store, but not delivered? With messaging, because conversations happen in one continuous thread, it’s easier to find historic information.
The advertising opportunity
Though messaging has long been a dominant communications tool in Asia and even Europe, we’re now seeing strong growth in the US as well. According to data from SimilarWeb, the daily average time spent on WhatsApp for a US user in 2021 was 28 minutes and 40 seconds.
And there’s appetite for ecommerce on this medium. With 83% of global consumers saying they would browse or buy products in messaging conversations, click-to-messaging ads could be a strong revenue driver for Meta.
I remember all of the skepticism when Facebook announced its $19 billion acquisition of WhatsApp in February 2014. For nearly 20 times the acquisition price of Instagram two years earlier, Facebook was acquiring a company that appeared to have limited advertising potential.
Already, click-to-messaging ads, with a $9 billion annual run rate, are one of Meta’s fastest-growing ad products. These ads enable businesses to communicate with customers directly through ads on Facebook and Instagram that originate as a thread on Messenger, WhatsApp or Instagram direct. Click-to-WhatsApp ads, meanwhile, have surpassed a $1.5 billion run rate, an 80% growth rate over last year.
But Meta has much work to do to ensure that both businesses and users can make the most of the platform. Currently, the company is integrating secure payment options into chats and developing additional functionality to make advertising via messaging more attractive to businesses.
For example, Meta is testing a feature that will enable businesses to send promotional message campaigns to customers who have opted in and adding lead filtering to better qualify prospective customers.
The key moving forward will be to introduce features that better facilitate ecommerce without jeopardizing the personal nature of the medium – which is ultimately what makes messaging so powerful from a commerce standpoint.
Gaining ground
Though Meta is best-positioned in the messaging market outside of Asia, one shouldn’t count out Skype, which is owned by Microsoft, or Rakuten-owned Viber. Neither currently offers advertising solutions as powerful as Meta, but both have the foundation needed to make a play in the space eventually.
Viber currently offers display advertising, stickers and augmented reality lenses as advertising solutions, but it has no click-to-call offering.
Though Skype doesn’t appear to offer click-to-call or other forms of advertising today, the company does have two offerings that could extend to advertising solutions.
Skype for Business, now Microsoft Teams, is a communications tool built for businesses to connect, which is what click-to-call does. And Skype for Content Creators enables creators to integrate Skype calls into podcasts, video blogs and live streams. This communications and commerce solution could power advertising, too.
Couple this with Microsoft’s advertising push with the company’s partnerships with Netflix and advertising pushes in Search (Bing, ChatGPT) and gaming (pending Activision Blizzard acquisition), and it’s not difficult to see how Skype could be part of Microsoft’s goal of doubling the company’s ad business to $20 billion.
Regardless of the device, application or vendor, messaging is having a moment in 2023. Meta has an opportunity to lead here, and let the metaverse rest.
“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.
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