Mobile Marketing Online Advertising Social Media Technology and Innovation

2016, the year messaging will become more than messaging

Lucie Rozinthe
Written by Lucie Rozinthe

In the beginning of this year, the main messaging apps of the moment have announced their plans for 2016 and beyong. And they have big plans. After spending the last couple of years building a significant user base, Facebook owned Messenger and WhatsApp, Snapchat, Slack are finally showing how disruptive they will be. But will they?

2015: the year of consecration for messaging

newsroom-customizationLast year was the year messaging apps went global. Messenger reached 800 million monthly users and was the fastest growing app in the US according to Nielsen. After the arrival of David Marcus, former CEO of Paypal, as VP of Messenging Product at Facebook, Messenger’s growth gained momentum. Marcus’ team improved the messaging experience with video call, customization and the ability to easily share photo or location.

They also set the basis for monetization of the app with enabling user to transfer money and businesses to talk to their (future) customers. But what’s even more meaningful, is the launch of the Messenger Platform that allows developers to integrate their apps in Messenger. With this platform, Marcus made sure the app could evolve and revamp innovation through time.

messenger_data

WhatsApp, the other Facebook owned app, founded in 2009 by Jan Koum almost reached one billion users. Unlike Messenger which is mainly used in Western countries, WhatsApp is predominant in emerging markets (India, Brazil and Africa). Thanks to Facebook resources, WhatsApp got the financial and technical backup its expansion needed.

On a smaller scale, Snapchat became a must have for Millennials. Today, more than 60% of US 13-35 years old smartphone user are Snapchatter (comScore mobiLens February 2015). Last year they developed Discover, a set of channels feed by partners such as Buzzfeed, Vice, CNN, National Geographic…  And now they are going for a more mature target, mothers. As Wired explained it, Snapchat is on the verge of its « mom moment ». It really is serious. Today they are predominant among youngsters but they are trying to acquire older customers, « [tip] from niche network to mainstream sensation and [become] the type of thing your mother will start using ».

Famous blogger, Gary Vaynerchuk is already hooked. He made one point right, unlike the previously mentioned apps, Snapchat is already both a messaging app and a social network. And furthermore, it managed to ingeniously catch the attention of the user: as Vaynerchuk said in his blog post, “If you have 1,000 followers on Snapchat, 900 of them will watch your story.” On top of that, the videos/photos you see are not only on full screen, but they are triggered by the user. Unlike Facebook’s auto play videos.

The last application I wanted to talk about is Slack. The death of emails has been announced for years, but here is the product that will definitely burry them. It is already used by Samsung, eBay, Pinterest, Deloitte, Harvard University, NASA’s Jet Propulsion Laboratory and the U.S. Department of State. In After only 2 years of existence, the company is valued at $2,8 billion. Founded by accident by Stewart Butterfield, Slack’s goal is to gather all the communication tool a team could need. And it seems to be working.

 

Overall, the common point of all these products is that their success comes from their ability to bring great user experience starting from a simple messaging app. Today, they are settled and ready to explode.

Money, money, money…

Now that the apps have a significant user base, it is time to monetize them.

For Slack, the choice was easy to make. Since its creation, they followed a freemium economic model. To attract new users, the basics of the app are free, but if you want to go further and access all the great feature, your company has to pay 7$ per user per month. That’s expensive but it’s worth it, even the more reluctant clients eventually pay. In this paper about Butterfield, Matt Honan describe how he convinced Gawker Media to subscribe through an epic Twitter staring fight. With their freshly raised funds, they now have the ability to grow even bigger and make sure their product overgrows email for good. The point is, Butterfield used what made its product great (disruptive communication integrations) to make it sustainable.

That is exactly what Snapchat wants to do by opening its app to native video advertising. Progressively, they will offer advertisers the ability to display video ads, full screen to a targeted audience. Thanks to Discover, and themed Stories, they will display relevant ads to the right population. But what makes marketers’ eyes sparkle, is the attention their ads will get. And that’s a huge advantage when you want to address over the highly solicited Millennials.

3v-views+

Facebook (Messenger and WhatsApp) is also trying to be smart. Instead of urging into classic annoying advertising banners to make profit out of their messaging app, they developed organic relationships between businesses and customers.

This is one of the reasons WhatsApp dropped its 1$ fee this in January.  Jan Koum made it clear while responding to Re/code:

“What we decided was that over the long term, the ads and monetization would perform better if there was an organic interaction between people using the product and businesses. So instead of focusing on ads first, what we did was we built pages, and we made that free. That way as many businesses as possible could get into the network.”

The idea is to slowly integrate businesses in the discussion and at the end of the day completely integrate them in the app. By doing so, Messenger and WhatsApp will become the go-to apps.

Messenger recently started this integration through its partnership with Uber. For some users, it is now possible to order a ride directly within Messenger.

 

With great integration comes great product

From a western point of view, Facebook’s strategy looks well-thought and innovative, but it is not that new. On the contrary, David Marcus turned his sigh to the West, and more precisely to WeChat, for inspiration. And he is right to look at his Chinese competitor because WeChat is now way more than a messaging app, it is a powerful mobile platform and maybe the future of mobile business.

What makes WeChat one of the most relevant mobile company is that it was created around and for mobile usage. In 2011, when smartphones went big, Tencent (its parent company) killed its desktop-born messaging app QQ to start everything from scratch. Unlike most of western tech people who grew from desktop to mobile, a significant part of Chinese people directly jumped into mobile. It gave them a fresher and wider vision of the opportunity of mobile. That is why WeChat is so big: they took advantage of all the functionalities of mobile to create a mobile-first experience. With WeChat you can: hail a taxi, recognize music, order food delivery, play games, buy movie tickets, check your flight, transfer money, access health data, book a doctor appointment, follow celebrities, donate to charity… You can even pay for offline purchase in some physical stores!

All this is made possible by what WeChat call “official accounts”. Thanks to these light versions of application you can develop new services within WeChat. It is a win-win deal, because through the accounts, developers can get secured payments through WeChat’s Wallet.

 

WeChat success made it ubiquitous for its 650 million monthly active users, and is inspiring Western messaging apps. Let’s see how 2016 will turn out for them, because WeChat already is the disruptive messaging application we are waiting for.

 

About the author

Lucie Rozinthe

Lucie Rozinthe

Learning about digital trends at GEM's Digital Business Strategy MS. I am also working at Deezer as a Junior Digital Media Manager on acquisition matters.