Betrayal or inevitability? Meta is putting ads in WhatsApp
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Betrayal or inevitability? Meta is putting ads in WhatsApp.
More than a decade after it acquired WhatsApp, Meta will begin showing ads within the app.
The move, announced Monday, could unlock a massive new revenue stream for the social networking giant. It also risks turning off some users and drawing scrutiny from regulators.
WhatsApp's founders had taken a strong anti-advertising stance before they sold the company in 2014.
'Remember, when advertising is involved you the user are the product,' co-founder Jan Koum wrote in a 2012 blog post titled, 'Why we don't sell ads.' Instead, WhatsApp charged users $1 each to download the app — a practice Facebook discontinued in 2016.
Koum stayed on to lead WhatsApp until 2018, when he left Facebook (now Meta) after reportedly butting heads with the company's leaders over user privacy.
Still, Facebook kept WhatsApp ad-free until now — longer than many industry observers had expected, given the pressure the company faced to show that its purchase of the app was worth it.
In the meantime, WhatsApp has grown into one of the world's largest social networks.
WhatsApp may not be as well-known as Facebook or Instagram in the United States, where more people use their cellular service, Apple's iMessage, or its Meta-owned sister app Messenger for personal chats. But it's a dominant messaging app in some of the world's most populous countries, including India and Brazil.
Meta CEO Mark Zuckerberg said in April that WhatsApp had surpassed 3 billion users, making it even bigger than Instagram. That's a vast untapped audience for advertising, which is how the company makes most of its money.
Recently, WhatsApp has found success with a feature that lets users chat with businesses, for example, to ask about their hours or to place an order. Meta has also been rolling out tools that let advertisers use AI to answer users' questions.
Now those businesses will be able to advertise in the app as well.
The ads will be limited in scope for now — as will the data Meta uses to target them.
In a blog post announcing the move, WhatsApp said the ads will be confined to its 'Updates' tab, which is home to a feed of recent status updates from the public-facing 'channels' a user follows. Brands will be able to promote their channel; charge users to subscribe to exclusive updates; or post an ad as a status update that will appear in followers' feeds. Those ads can include invitations to message the business directly.
Like most of Meta's ads, they'll be targeted to users based on data WhatsApp collects about their interests. But WhatsApp will only use 'limited info like your country or city, language, the Channels you're following, and how you interact with the ads you see,' the post explained. In other words, the company won't be targeting ads based on whom a user chats with or the contents of those chats, which will remain private and encrypted.
Meta's stock rose by about 3 percent Monday as analysts hailed the potential for a major new revenue stream. While the company has continued to grow in terms of total users across all of its apps, its last quarterly earnings showed slowing ad growth and a drop in the amount of money Meta makes from the average user.
As investors cheered the news, some privacy and competition advocates raised concerns.
The move drew criticism from the privacy-focused Austria-based nonprofit NOYB, an acronym for None of Your Business, which is chaired by the lawyer and activist Max Schrems. In a statement Monday, Schrems said Meta's move could violate Europe's strict competition and privacy laws if it involves linking users' data across the company's various social networks without their freely given consent.
Meta spokesman Joshua Breckman told the Tech Brief that's a misreading of the company's announcement. He said the ads will draw on data from users' Facebook and Instagram accounts only if they 'opt in' to adding their WhatsApp account to Meta's Account Center, where they can set their ad preferences across the various platforms.
'I don't think we could be any clearer what information we're using to show ads — and that is, limited information from WhatsApp,' Breckman said. He added that people who use WhatsApp only for private messaging will not be affected by the changes at all.
The move's timing suggested that Meta is feeling confident about the outcome of its landmark antitrust trial.
Closing arguments wrapped last month in a trial over the Federal Trade Commission's allegation that Meta holds an illegal monopoly over personal social networking, thanks in large part to its purchases of WhatsApp and Instagram. The FTC is seeking to split those services from the rest of the company.
A judge is expected to rule in the case this year.
On X, the outspoken antitrust advocate Matthew Stoller implied that the announcement is further evidence of Meta's monopoly power. 'Meta is putting ads in WhatsApp, aka raising prices,' he wrote.
On Bluesky, the president of Signal — a nonprofit that prides itself on secure, private messaging — took the opportunity to tout that service as an alternative. 'We promise, no AI clutter, and no surveillance ads, whatever the rest of the industry does,' Meredith Whittaker posted.
Trump Organization unveils mobile phone service (Drew Harwell and Aaron Gregg)
The White House wants you to laugh at its deportation memes (Drew Harwell)
EchoStar soars 50% after report Trump urged EchoStar, FCC chair to reach deal on licenses (Reuters)
OpenAI wins $200 million U.S. defense contract (CNBC)
OpenAI and Microsoft tensions are reaching a boiling point (Wall Street Journal)
TikTok pushes deeper into AI-generated video ads with new tools (Bloomberg)
For the first time, social media overtakes TV as Americans' top news source (Nieman Lab)
U.K. watchdog launches probe into $13.25 billion Omnicom-Interpublic merger (Reuters)
Meta's AI chatbot is divulging users' most private searches (Naomi Nix and Nitasha Tiku)
Meta AI adds an extra step to prevent embarrassing overshares (Business Insider)
Minnesota shooting suspect allegedly used data broker sites to find targets' addresses (Wired)
Emails reveal the casual surveillance alliance between ICE and local police (404 Media)
Intel will lay off 15% to 20% of its factory workers, memo says (The Oregonian)
How to better brainstorm with ChatGPT in five steps (Danielle Abril)
6 great tech products for your summer fun (Shira Ovide)
China joins US in brain implant race with clinical trial (Bloomberg)
Thousands of U.K. university students caught cheating using AI (The Guardian)
That's all for today — thank you so much for joining us! Make sure to tell others to subscribe to the Tech Brief. Get in touch with Will (via email or social media) for tips, feedback or greetings.
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