Will WhatsApp Spark A ‘Pull Advertising’ Revolution?

jasonrothmanData-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Jason Rothman, general manager, mobile and social, at SteelHouse.

WhatsApp last month announced its plan to share data with Facebook, opening its doors to the marketing and advertising worlds.

The push behind this update to WhatsApp’s privacy policy not only enables Facebook to serve more relevant ads but also could, in the future, allow for targeted and contextual-based advertising in WhatsApp. Putting the power of messaging app data to work could help the industry deliver “pull” advertising – advertising at its best – within a self-contained, do-it-all platform.

What’s so intriguing about messaging apps is their ability to dominate users’ mobile moments and total screen time. These apps allow users to combine their mobile interactions together to search, chat, share locations and more. They’re all-in-one platforms, and they’ve created a huge opportunity for brands to get a more holistic view of individuals within their target audience. With all of their inherent capabilities, messaging apps might have the potential to become an internet-like platform.

And, of course, they have scale. The WhatsApp, Facebook Messenger and WeChat apps lead some of the major social networks in popularity and are quickly expanding their user bases, according to Mary Meeker’s “2016 Internet Trends” report. WhatsApp alone has more than 1 billion monthly active users.

Perks For Advertisers

One key benefit of messaging apps is their cross-device functionality. While they’re not yet reaching the levels of Facebook, in terms of the number of devices they encompass, the quality of their data is on par with Facebook’s because it’s deterministic, based on real information about users.

Because today’s consumers use a slew of devices, that kind of definitive data and cross-device tracking helps brands and advertisers stay closely aligned with the evolved consumer buying journey. Visibility into cross-device profiles enables them to not only know when, where and to whom to send an ad but also to which device, depending on device-specific behavior.

The cross-device data ultimately saves the advertiser money by helping them refine their targeting to the right devices. Interestingly, the massive network of deterministic user data that is so critical to the advertising industry will get a huge boost once WhatsApp data is combined with Facebook’s. 

Another and, perhaps, more important possibility with WhatsApp – something general utility apps cannot compete with – is that WhatsApp is rich with contextual data and has the potential to be a closed-loop platform. This is a missing piece of the puzzle in shifting from “push” to “pull advertising.”

For example, say a user is chatting via WhatsApp with a friend about a concert he or she wants to attend. If a relevant brand or advertiser has that information, it could be able to serve an ad for discounted concert tickets, including a direct “buy button” link in-app. Having an easy purchase flow built into a single experience turns advertising into more of a hyper-personalized concierge-like experience, rather than an annoying pop-up or irrelevant banner consumers want to navigate away from.

The future of messenger app advertising is similar to the bot built into Slack, the enterprise communication platform. The bot is a smart interface built on top of the platform that looks as if it’s interacting with you as you type. In messenger apps, we’ll see a similar phenomenon, where the artificial intelligence layer will match ad campaigns with what people are typing.

Privacy Implications

All benefits aside, it’s important to note that placing ads in chat apps is very different than placing ads in other apps or in-stream – we don’t know how consumers will react to ads served in their direct communications. While that’s not yet possible in WhatsApp, WhatsApp does understand the value of privacy to its users. It has given users an end-to-end encryption option, which means no one but the user and those with whom they’re communicating can access the content of those messages, including WhatsApp.

However, consumer sentiment is changing terms of privacy, and people are now more willing to share personal data with brands in exchange for rewards if asked for permission. The advertising industry has an opportunity to better educate consumers on the value of data sharing, but must also avoid getting greedy with the data it does accumulate – it must build trust with its target audiences. A decade ago, people were upset about GPS tracking when flip phones came to market. Now, pretty much every app requires location services to provide full functionality, and users don’t think twice about sharing that data because of the ways location services have improved their lives.

Sharing contextual data is just the next rung on the ladder toward concierge-like advertising and a world where advertising works to support consumers’ needs, the epitome of pull advertising. Instead of mass advertising to consumer segments, there exists an opportunity for WhatsApp and other messenger apps to provide relevant, personalized ads that offer direct value to every consumer.

Follow SteelHouse (@SteelHouse) and AdExchanger (@adexchanger) on Twitter.

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