The major messaging apps are all free. What is their business model? How do they generate revenue from the billions of interactions that occur there?
Tens of billions of messages are exchanged every day around the world via WhatsApp instant messaging created in 2009 and owned by the Meta group since 2014. Discussion groups are multiplying: colleagues, family, friends, sport,… each message sent and received is automatically encrypted. using powerful servers located in data centers around the world.
Running these infrastructures to manage this innumerable data is very expensive. Yet no WhatsApp user has ever had to spend a single cent. With 2 billion monthly active users worldwide, how does WhatsApp generate its revenue? This is the question the BBC asked itself.
Respect for privacy
Unlike Facebook and Instagram, advertising as such is not present on WhatsApp. On the other two networks, it is inserted between the storiespublications, and even between different conversation boxes on Messenger. On WhatsApp, this is not (yet?) the case. The tool has always been presented and sold as greatly respecting privacy.
AI to target ads
But advertising has nevertheless infiltrated it in recent years. Companies send communications directly to customers via dedicated channels, if these customers have authorized them by giving them their telephone number. A bit like sending emails. Businesses pay extra to interact one-on-one with their customers, whether for conversations or transactions.
The messaging service WhatsApp has also recently relied on artificial intelligence. Using AI, Meta wants to help businesses send more targeted ads on WhatsApp, in order to further monetize messaging on the green phone. To do this, the AI will observe the behavior of customers on Instagram and Facebook, and deduce whether or not to send them this or that advertising message.
Buy a bus ticket
This type of channel is not yet very widespread in Europe, but in Bangalore, India, the leading country of use with 390 million registered users, it is, for example, possible to buy a bus ticket and choose your seat directly via WhatsApp. “Our vision is that a business and a customer can do everything directly in a single conversation,” Nikila Srinivasan, vice president of business messaging at Meta, told the BBC. This includes booking tickets, product returns or payments, without leaving the chat thread.
“If it’s free, you are the product”
The fact that WhatsApp is backed by a huge parent company – Meta, which also owns Facebook and Instagram – significantly increases the potential for these commercial interactions. Businesses can also pay for a link that launches a WhatsApp conversation from an ad on Facebook or Instagram. According to Srinivasan, this feature alone brings “several billion dollars” to Meta. The most popular business model for messaging apps, however, remains targeted advertising. Which confirms the now well-known adage “If it’s free, you are the product”.
Other messaging apps are adopting different modelsdetails the BBC. Signala platform known for its security protocols, is a nonprofit organization funded by donations, including a $50 million donation from Brian Acton, co-founder of WhatsApp. Discordused mainly by young players, operates on a freemium model: free registration, but with paid features. It also offers a paid subscription, Nitro, for around 10 euros per month. Instantbehind Snapchat, combines several of these models, with advertisements, paid subscriptions and the sale of augmented reality glasses. According to the site Forbesbetween 2016 and 2023, the company also earned nearly $300 million from interest alone. But Snap’s main source of revenue is advertising, which brings in more than $4 billion a year.
