WhatsApp New Update: Meta to Introduce Ads on WhatsApp: Will It Appear Between Chats? What It Means for Users?

WhatsApp New Update: WhatsApp, a widely used communication app, is set to introduce advertisements on its platform. The Meta-owned service announced plans to display ads in its Status feature, where users share photos, videos and text that vanish after 24 hours. Users will encounter sponsored ads while browsing these updates. Additionally, WhatsApp will allow users to pay for promoting their Channels and offer subscriptions for exclusive content.

WhatsApp to Introduce Advertisements on Platform: Will They Appear Between Chats?

These new features will be confined to the 'Updates' tab, which reportedly has 1.5 billion daily users. Ads will not appear in personal chats or the calls tab. This shift marks a significant change for WhatsApp, deeply integrated into global social and economic structures. It may signal Meta's intent to monetise WhatsApp's vast user base of two billion people, with India being its largest market.

WhatsApp's Revenue Streams

WhatsApp's revenue model has intrigued many since it offers most services for free. Initially, it charged a $1 annual subscription fee but dropped this after Meta acquired it in 2014 for $19 billion. Despite being against in-app ads initially, WhatsApp now generates revenue through various means like Business API and click-to-WhatsApp ads.

The Business API is a primary revenue source where enterprises pay to communicate with users at scale. This includes e-commerce sites updating customers about purchases or airlines sending boarding passes via WhatsApp. Pricing varies by region and message volume.

Click-to-WhatsApp ads allow businesses to include links in their ads that open a chat with users when clicked. These ads appear on Instagram and Facebook feeds and stories as well as Facebook Marketplace. In 2023, Meta CEO Mark Zuckerberg stated that click-to-message ads had achieved a $10-billion revenue run-rate globally.

Monetisation Through WhatsApp Pay

WhatsApp Pay enables users to send money directly through the app without fees for individuals. However, businesses incur charges for payments received via this service. It is available on a large scale in markets like India, Brazil, and Singapore. Earlier this year, India's NPCI lifted the 100 million-user cap on WhatsApp Pay.

Besides direct revenue streams, WhatsApp collects metadata on user behaviour valuable for digital advertising. Ads will be served using Meta's technology without accessing personal messages or calls due to end-to-end encryption. Instead, data points like city or language will determine ad targeting along with user behaviour tracking.

WhatsApp User Privacy Concerns

Meta clarified that cross-platform profiling would occur only if users link their WhatsApp accounts to the Accounts Center: "Adding WhatsApp to Accounts Center is optional." Users can see why specific ads are shown and manage ad settings but cannot opt out of seeing ads entirely.

In response to these changes, Signal president Meredith Whittaker assured that Signal would remain free from AI clutter or surveillance ads regardless of industry trends. Signal relies on donations and was supported by a $50 million donation from WhatsApp co-founder Brian Acton in 2018.

Advertising Dominance Among Messaging Apps

Discord follows a freemium model offering free sign-up but charges for additional features like games through its Nitro subscription package providing high-quality video streaming and custom emojis access. Advertising remains dominant among social networking apps as seen with Snapchat reporting increased ad revenue recently.