Why is Mark Zuckerberg so enthusiastic about Meta’s Whatsapp for Business?

WhatsApp is already very popular among Americans. Meta Platforms is now focusing more on expanding its small company base.

WhatsApp Business, the parent company of Facebook, was established in 2018 with free, simple tools to help small companies stay in touch with clients, providing a method for them to directly communicate, search for products, and signal purchasing interest.

Soon, the company will launch a premium service for small businesses, and it is doubling down on a newer advertising format known as “click-to-message,” which allows consumers to click on a company’s ad on Facebook or Instagram and immediately begin a conversation with that company on Messenger, Instagram, or WhatsApp.

According to analysts, these approaches give Meta the possibility to increase advertising revenue, stay relevant with small firms, and acquire incremental money from premium services offered.

Keeping more within the Metaverse
In October 2014, Meta (formerly Facebook) paid approximately $22 billion for WhatsApp. Since then, industry observers have been looking for signals that the business intends to monetize the platform more. That time may have arrived.

“There is no signal loss if I stay on any of the Meta properties and I’m communicating using Meta, asking questions, and buying — all within the platform,” said Mark Kelley, managing director and senior equity research analyst at Stifel. “What has really impacted social media companies this year is signal loss.”

WhatsApp, according to Meta CEO Mark Zuckerberg, will be the “next chapter” in the company’s history. He stated that the company’s “playbook over time” has been to establish services for a broad audience and then “scale the monetization” after that goal is met. “And we did it with Facebook and Instagram.” “WhatsApp is going to be the next chapter, with business messaging and commerce being a big deal,” he said.

This message from Meta comes at a time when the company is in transition and investors are uncertain. The company just disclosed a revenue and earnings loss and forecasted a second consecutive quarter of falling sales. This year, Meta Platforms’ stock has lost almost half of its value. Mark Zuckerberg is spending enormous sums of money, currently at a loss, on the metaverse becoming a growth driver for the company in the future. However, with his bet on the metaverse taking a decade to materialize, the Meta CEO has highlighted that in the short term, WhatsApp is one of the activities to focus on for growth.

WhatsApp Business is divided into two parts. For small enterprises, there is the WhatsApp Business app. There’s also the WhatsApp Business platform, which has an API for major enterprises like banks, airlines, and e-commerce sites. Each month, the first 1,000 conversations on the platform are free. Following that, businesses are paid based on regional rates per discussion, which covers all messages delivered in a 24-hour session.

Small businesses can communicate directly with clients using the free app. They can program automated messages to react to customers after business hours, for example, with information about the business, such as a menu or the location of their firm. Businesses can use it to send customers product images and descriptions, as well as other information that may be of interest to them. There is no opportunity to pay over WhatsApp at the moment, but a company spokeswoman said it is a feature Meta is contemplating.

Premium capabilities for small businesses will include the ability to manage chats across up to 10 devices, as well as new customizable WhatsApp click-to-chat links to assist businesses to attract clients throughout their web presence, according to the company’s blog.

“We believe that messaging, in general, will be the future of how people want to communicate with businesses and vice versa.” “It’s the quickest and easiest way to get things done,” added the representative.

Why is the WhatsApp push focusing on Main Street businesses?
Analysts see a lot of promise. “Messaging is a global forum that everyone uses on a regular basis.” “It’s massive, and it’s growing,” Wells Fargo Securities managing director and senior equities research analyst Brian Fitzgerald said.

In the United States, WhatsApp remains a “largely untapped resource by small businesses,” according to Rob Retzlaff, executive director of The Connected Commerce Council, a non-profit organization that encourages small businesses to access to digital technologies and capabilities.

Meta believes this will change with time. “We are deeply convinced that that behavior will continue to grow all over the world,” Sheryl Sandberg, Facebook’s chief operating officer, said during the company’s second-quarter earnings call on July 27. According to the company, 1 billion users message a business each week via WhatsApp, Messenger, and Instagram.

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A 2021 report from The Connected Commerce Council emphasizes the need for free and low-cost digital solutions for small enterprises. According to the survey, almost 11 million small enterprises would have closed all or part of their operations if not for digital tools that allowed them to continue operating.

Advertising money is one of Meta’s motivations for boosting WhatsApp Business. “Click-to-message is already a multibillion-dollar business for us, and we’re seeing strong double-digit year-over-year growth,” Sandberg said during the company’s second-quarter earnings call. “One of our fastest-growing ad formats for us is click-to-message,” she noted. The company does not disclose how much of its revenue is generated by WhatsApp vs Messenger or Instagram.

According to Stifel’s Kelley, businesses prefer this format because it’s “an inexpensive way to interact [with consumers] that feels a little more personal.” Furthermore, it solves a problem caused by a privacy modification made by Apple to its iOS operating system last year.

Assume a consumer sees a Facebook ad for a shoe retailer and contacts the company directly via WhatsApp. “There is no leakage here in a world where we’re trying to do more and more with less and fewer data.” “Everything is safe,” Fitzgerald remarked. “No one [else] knows I bought these sneakers, and there’s a direct business-to-consumer connection.”

Furthermore, Kelley believes that by selling premium services, Meta may increase revenue incrementally.

José Montoya Gamboa, the owner of Malhaya in Mexico, said he plans to pay for the premium version when it becomes available because he enjoys the option to use it on numerous devices.

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But Geraldine Colocia, community manager of Someone Somewhere, a registered B Corporation that works with hundreds of craftspeople throughout Mexico, is skeptical. She’s been using the app’s free version for more than two years and would consider paying for it, but the decision will be based on the real features and pricing, she added.

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