New Delhi: Meta Platforms on Thursday said advertisement revenue from its click-to-message ads in India across its social media and messaging platforms, including Facebook, Instagram and WhatsApp, has doubled during the September quarter.
“Business messaging continues to grow across our services and will be the next major pillar of our business. There are over 600 million conversations between people and businesses every day on our platforms. To give you a sense of what this could look like when it’s scaled globally, every week now, more than 60% of people on WhatsApp in India message a business app account. Our revenue from click-to-message ads in India has doubled year-over-year. This is going to be a really big opportunity for new business AIs,” Mark Zuckerberg, chief executive of Meta, said in his remarks to investors after the social media giant reported its fastest revenue growth rate in the past two years.
Click-to-message ads involve advertisements that run on social media platforms, such as Meta’s Facebook and Instagram, and direct users to a conversation interface on one of Meta’s Messenger, Instagram, and WhatsApp chat platforms for businesses and customers to connect with each other. The company earns a commission from businesses using the chat service and selling products through these platforms.
In India, WhatsApp is a key monetization avenue for Meta. As per industry estimates, WhatsApp could have over 480 million monthly active users in India—its highest base worldwide. To push this further, on 19 September, Meta launched multiple new features to double down on WhatsApp as a business offering in India—launching customized conversation tonalities for businesses called ‘Flow’, as well as in-chat payments via Unified Payments Interface (UPI), and verified badges for authentic businesses.
Multiple industries, including established businesses and small ventures, are steadily expanding adoption of click-to-message ad formats for user base conversion. A senior marketing industry executive who offers consultation services to multiple top hospitality groups in India said this is the obvious way for the brands.
“Companies everywhere are betting on more users getting familiar with text interfaces rather than traditional advertising. Top hotels are using chat interfaces as a way to promote special offers this festive season, and smaller brands with a younger outlook have preferred the medium ever since it was available in India. This could be alarming for Google’s traditional ad business,” the executive said, requesting anonymity.
Google, too, has taken note. On 19 October, it launched Business Messages within the Shopping tab on its core search platform. While the latter seeks to grab a share of WhatsApp’s business pie, it remains to be seen how adoption for it grows.
“WhatsApp is the default texting app for smartphone users in India, which is what makes it ubiquitous and preferable for businesses. The same isn’t true for Google Search, and it is not a natural instinct for users to find and chat with businesses from within their browsers,” he added.
Zuckerberg’s statement comes amid contrasting situations for Meta—while Zuckerberg and chief financial officer Susan Li expressed caution and uncertainty about Meta’s core ad revenue business in 2024, Meta’s India business has continued to grow steadily. The company’s India earnings for FY23, filed with the Registrar of Companies (RoC) on 23 October, showed a 13% increase in gross advertisement revenue to ₹18,308 crore from the previous year, while net profit expanded 19% to ₹352 crore.
Meta saw mixed fortunes post-earnings. While it beat analyst estimates to post 21% constant currency quarterly operating revenue growth to $34.1 billion, its share was down 6.1% over previous closing at the time of writing—driven by uncertainty in the upcoming quarters.
“We are seeing more volatility at the start of the (December) quarter. That’s in part why we widened our guidance range to capture that uncertainty. While we don’t have material direct revenue exposure to Israel and the Middle East, we have observed softer ad spend in the beginning of the fourth (December) quarter, correlating with the start of the conflict,” Li said.
She further added that the company’s “revenue outlook is uncertain” for the next year, and that Meta will “remain disciplined with (its) investment approach” in the year ahead. Early outtakes from industry analysts pegged Meta’s share price decline to the uncertainty commentary during its earnings call.
“Exciting news! Mint is now on WhatsApp Channels 🚀 Subscribe today by clicking the link and stay updated with the latest financial insights!” Click here!
Download The Mint News App to get Daily Market Updates & Live Business News.
Updated: 26 Oct 2023, 10:24 PM IST
