What is the efficacy of WhatsApp as a medium for ads and marketing?

Since Facebook acquired WhatsApp in 2014, the tech giant has been consistently pushing the idea of bringing advertisements to WhatsApp. Facebook made an official announcement last year, disclosing its plans of putting advertisements on the messenger service platform. While the dates weren't given, rumour had it that Facebook intended to carry out the process in 2020.

2020 is here, but the advertisements on WhatsApp aren't. Facebook recently announced that the company had halted its plans to get advertising on WhatsApp, at least for now. Many critics pointed out that the decision could have been an outcome of the global hue and cry that has embraced Facebook on account of user-privacy and data management.

Over the years, advertisement space has transformed into something so omnipresent, that it is hard not to spot an ad on practically any digital platform. It is therefore not tough to conceive why Facebook would want to bring ads to an encrypted messaging service like WhatsApp. However, the WhatsApp conundrum has been around long enough to spark multiple discussions on its necessity, and its possible infringement on user-privacy.

Amidst all the talk, WhatsApp's efficacy still remains to be explored in terms of marketing and micro-targeting. The platform has been in use for marketing purposes for a while now with many businesses promoting their brands and products by engaging with the consumers via messages. It's just the formal touch that's missing, and a proper structure. Considering the possibility that the platform might eventually be leveraged for advertising, it is pertinent to understand how efficient it would be in delivering.

We sought industry opinion on this.

Jaipal Singh, assistant vice president - account management, Dentsu Webchutney

WhatsApp’s usage as an advertising and marketing tool picked up scale after the launch of 'WhatsApp for Business' platform. It opened up the opportunity for opt-in interactions for brands. It provides for clutter free captive audiences for brands, and therefore, has far better engagement levels than any other digital platform. It has been an effective tool for brands to engage customers in their post purchase journey, especially for travel, banking and e-commerce brands.

At the core of Facebook’s business is its users. This is the segment which has been up in arms against the social platform over privacy concerns. These concerns have not been totally unfounded either. User privacy is a policy-grey area globally; policies are trying to catch-up and define it more objectively, and so it’s an open ended conversation till then.

I believe that users have started to understand that there is a cost to using the products and services on digital platforms, which is paid via access to one’s own data. The platforms have a responsibility to clearly state the usage of their data without hiding behind complicated legal jargon. Going forward, ‘trust’ in the platform is going to be a key factor in users' adoption. Marketers would also value such platforms more and will be able to derive better value through them.

Amod Dani, executive creative director, Leo Burnett Orchard

Direct messaging to consumers is something most Brands would really lap up. Considering that WhatsApp has become a very powerful individual and a group chat platform. It does offer a very lucrative opportunity. But would the consumer be interested in this intervention? In the middle of constant messaging (unlike Facebook messenger), this intrusion, if not crafted well, would be hard a pill to swallow.

WhatsApp brand communication shouldn’t go down the SMS way. The communication shouldn’t be so focused on offers and sales that we totally lose out on the direct interaction and dynamism that the platform offers. Brands must use GIFs, videos, emojis and get with the lingo to develop a ‘chat-voice’ just like you and I. Unique and distinct so as to not sound like advertising but chat like a real person. People chat with people, not bots. So far, brands haven’t really made the most of this opportunity and I think they’ve missed the bus as Facebook backs off plans to post Ads on WhatsApp.

Personal data protection is critical across platforms. Being a responsible brand, Facebook would never want to risk this. I think it’s a fair call by Facebook. WhatsApp carries a lot of positive, personal equity and intervening that privacy through commercial communication would risk ruffle the hard-earned trust and goodwill. Building ads for an encrypted service does come with its fair share of challenges, privacy protection being the foremost. Marketers would do well to respect Facebook’s decision and actively look at Facebook’s other opportunities to directly engage with its audience.

Nishant Malsisaria, vice president – Product Strategy, DAN Data Sciences

The current state of WhatsApp marketing are actually split into two forms, small business via Android app & Business API driven. The latter is more effective since it is targeted, user consent driven and can have a conversational bot built on top of it making the overall experience of the advertiser & user lot more effective.

I think, while the global outrage on privacy consciousness plays an important role, currently everything on WhatsApp is 100% user initiated. Ads mean the control moves away from the user and therefore the rethought. WhatsApp plans of click to WhatsApp ads would be a lesser impact compared to how marketers use this consent to exploit & spam the users with conversational AI. The factors of promotional conversations and constant push is where marketers need to draw a line and give an overall pleasing experiences to users. This will also help them build a higher lifetime value customer.

I’m certain that topicality will play a very large role in terms of communication. Majority spike in ad dollar spend in India is skewed towards topical events whether it is festive or seasonality driven (like summers for AC). Brands would have a great opportunity to gamify this aspect to not only build engagement but also drive commerce which in most cases is the end goal.