Marketing | 06.09.2016

The Inevitable Monetization of WhatsApp

To the discontent of many, WhatsApp just announced that it will share user information with its parent company, Facebook. The messaging service claims they’re implementing these changes so that they can “explore ways for you to communicate with businesses that matter to you too”. Basically, the new privacy settings allow Facebook to collect more data about users. When the social giant acquired the messaging service in 2014, Jan Koum, CEO and co-founder of WhatsApp, emphasized that they would run independently, assuring users that their communications would remain ad-free. Since the announcement, privacy watchdogs are crying foul, claiming that the changes go against an agreement between Facebook and the US Federal Trade Commission in 2012, which stipulated that they must obtain user consent before sharing their information beyond current privacy settings.

HOW IT WORKS

WhatsApp users will be seeing the change to their privacy settings, though the platform is giving users a month to opt-out of sharing information with Facebook. The messaging service still emphasize that users will not be seeing ads within WhatsApp, but rather the information shared with Facebook will be used to enhance the way users communicate with businesses. For example, you might receive notifications when deliveries are made or flight status information.

POV

Although users are raising their pitchforks, chastising Facebook and WhatsApp for going back on their promise to maintain user privacy, the move was inevitable. Facebook’s acquisition of the service had to have strings attached and tapping into the social network’s existing structures makes sense for WhatsApp’s revenues to grow. Look at Instagram. The photo sharing service employed Facebook’s algorithm to improve user experience and recently introduced a Stories feature that uses this algorithm to prioritize certain feeds. Being part of a larger network has helped the photo and video sharing social platform grow and the same could happen when Facebook and WhatsApp become more integrated. When the announcement was first made, we spoke of our excitement of the acquisition. So what does this new development mean for WhatsApp?

  • THEY WILL LOSE USERS… AT FIRST: It’s still too early to tell for sure, but the platform will see a decrease in the number of users, particularly those who deem WhatsApp not to be worth giving some of their privacy away. However, I anticipate these losses to be negligible. Many will argue that this throws the privacy debate out the window, questioning the trustworthiness of the encryption. WhatsApp very clearly stipulated that no one would have access to the actual chats of users. So although, Facebook now has access to user information, they will not have access to your chat history. If users are happy to share this information with Facebook and WhatsApp separately, then they shouldn’t have a problem with platforms working together to give you a more unified experience.
  • MORE INTEGRATIONS: Although the company has given examples of how the changes will affect user experience, we are yet to see this in practice. If you see the way brands like KLM have leveraged Messenger, the changes could mean seamless customer experiences. These social platforms have transformed customer service and integrating with Facebook data could finally give WhatsApp that competitive business edge. The opportunities for brands could go beyond just enhancing their relationships with brands. By suggesting that you would receive flight status notifications, Facebook is giving users a taste of the future. They’re clearly looking to integrate their services so as to create a clear customer picture and making themselves ready for a Virtual Personal Assistant (VPA) enabled world (which is not surprising considering the sizable investment the social giant has made on their machine learning project). Could this be the first sign of things to come?
  • THE PRIVACY DEBATE WILL RAGE ON: The anger over this announcement will not die down any time soon. I wouldn’t be surprised if privacy groups take Facebook and WhatsApp to task on the new changes. There needs to be a process for checks and balances in this overly connected world. Privacy concerns will not waiver and we can expect to see more government bodies involved and legislation passed to protect users in this shiny digital world.

It’s still early days to define the real impact on users, businesses and the platforms themselves. For now though, like any user, I’m filled with a mixture of excitement and dread as I see these social giants circle ever closer around us.

 

This post was originally posted on Resolution MENA’s blog

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