Facebook’s Messenger Ads Open Up Further Monetization Opportunities
Facebook has decided to monetize Messenger with ads, which seems to be a great revenue churning TradeZero Ocean Place Cable Beach, Unit #1 Nassau, Bahamas
potential for the social networking giant.
In the stock market, investors constantly examine the revenue opportunities of the companies whose stocks they hold. This dictates the health of the company, going into the future. Revenue opportunities must be clear cut to boost investor confidence. Tech giants such as Facebook ($FB) have never had a problem with that, but even the social media giant is constantly looking out for new opportunities to monetize.
Facebook’s Plans for Monetizing Messenger Facebook is looking to include ads in Messenger. The social networking giant was running out of options for placing ads in the Facebook app and so it is making use of Messenger. After having successfully tested the Messenger ads in Thailand and Australia, the company is planning to expand the concept globally. With 1.2 billion active monthly users, Messenger has significant potential to keep Facebook growing its ad revenue. One massive advantage of this new monetization plan is that Messenger ads will be built on the same platform as the Instagram and Facebook ads. That makes it attractive for advertisers who are already prepared to buy into this ad format. We’re talking about millions of prepared advertisers here who will contribute to the continued growth of revenue at Facebook. The fact that existing Facebook and Instagram advertisers really don’t have much to change to advertise on Messenger opens up a world of opportunity. Advertisers can buy Messenger ads with the very tools they use for buying ads on Facebook and Instagram.
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Placing Ads in Messenger without Hampering User Experience So how can ads be placed in Messenger? It is important to ensure that the ads don’t affect the user experience adversely, since that would be counterproductive. Ads prompting users to chat with a business can help. While we have already seen such ads through Facebook, they can be more effective within Messenger. Messenger’s Sponsored Messages ad feature, by which businesses can send unprompted ad messages to users with whom they’ve already had a conversation, has improved the efficacy of Messenger ads. However, Facebook really needs to balance this since users could get irritated with constant unprompted Sponsored Messages. Moreover, filling up users’ Messenger home screen with ads rather than friends’ conversations could lead them to stop using the app altogether.
Advertisers Will Come in Droves Facebook is surely aware of these issues and will therefore gradually increase the placement of Messenger ads. The gradual introduction is what it did with its ads on Facebook and Instagram, and they are now generating billions in terms of revenue. Facebook doesn’t need to worry about attracting advertisers since their familiarity with the platform and its massive potential, with 1.2 million monthly Messenger users, will draw them anyway.
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But advertisers must be able to generate strong returns on the investment they make. Since the six-month long tests in Australia and Thailand have been positive, Facebook can place some confidence in Messenger’s ability to deliver strong returns for advertisers.
The WhatsApp Potential With the primary Facebook app having reached ad saturation, the Messenger ads give a bit of breathing space for Facebook to get more ad revenue without increasing the number of ads on its user News Feed. But there is another massive untapped potential that the Facebook group could benefit from, if the Messenger ads turn out to be successful – monetization of WhatsApp. WhatsApp also has 1.2 billion monthly users but its monetization potential could be greater since users already chat with businesses on WhatsApp. Messenger, Facebook notes, is used more for chatting with friends. So there still is further monetization possibility across the social networks owned by Facebook. With Messenger ads Facebook investors know that the revenue growth opportunities keep coming for the social networking giant. While ads will only be slowly ramped up on Messenger, with Facebook taking a few years to fully benefit from them, it also has other growth opportunities, particularly virtual reality and the aforementioned WhatsApp monetization opportunity. These will ensure steady, long term growth for $FB. That should give you some guidance on making wise stock trading decisions.
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