Will Businesses Take Facebook’s Bait This Time?

A lot of business have felt gamed by Facebook after the company gave them a free way to reach people by their pages, got them hooked on that, and then made it so they can only reach a much smaller amo...
Will Businesses Take Facebook’s Bait This Time?
Written by Chris Crum

A lot of business have felt gamed by Facebook after the company gave them a free way to reach people by their pages, got them hooked on that, and then made it so they can only reach a much smaller amount of fans without paying for sponsored posts. It sounds like Facebook is going to try a similar approach in its efforts to monetize the exceedingly popular Messenger.

Will you take the bait? Do you expect to invest in a Messenger strategy as Facebook makes it more business-friendly? Share your thoughts in the comments.

Facebook reported its Q2 earnings on Wednesday. Among the may topics of conversation on the ensuing conference call was the growth and potential monetization of Messenger.

As far as growth, the product is now up to over 700 million users. To put that in perspective, Twitter only has 316 million monthly actives.

According to Mark Zuckerberg, Messenger is a major contributor to the 46 minutes per day on average that people spend across Facebook products, and that doesn’t include the 800 million-strong WhatsApp. Over the past six months, Facebook has made performance improvements to its apps including Messenger, which Zuck says now lets people send messages up to 20% more quickly while the app starts twice as fast as before.

The company also noted that “virtually all” Messenger users use News Feed. In other words, there is hardly anyone that uses Messenger but not Facebook itself.

“On Messenger, this quarter, we rolled out a number of new features, including mobile video calling, a new way to share locations and the option to sign up for Messenger without using a Facebook account,” he said in his prepared remarks. “We also continue to make good progress building out the Messenger platform. We expect these improvements to continue making Messenger a more useful and engaging experience for lots of people. More than 700 million people now use Messenger and we’ve reached more than 1 billion downloads on Android. These milestones are a good sign that we’re on the right path here.”

During the Q&A portion of the call, Zuckerberg was asked about the company’s strategy with Messenger and WhatsApp. Here’s what he had to say (via Seeking Alpha’s transcript of the calls):

So the playbook that we’re going to run with Messenger and WhatsApp is kind of similar to how we thought about building a business in Facebook and News Feed, where if you go back to 2006 and 2007, there were a lot of people who were kind of encouraging us to just put banner ads and kind of inorganic content into the experience, and 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. And we built insights to make it so that businesses knew how they were driving business when they used pages for free and could post them to News Feed. And then on top of that whole ecosystem, we then had the opportunity to build what has turned into a News Feed business that we’re really proud of, right. That we think is driving a lot of value and good content for people who are using the platform and helping a lot of businesses find customers and sell their products and grow overall.
Messaging, I think, is going to be pretty similar, right? Where right now some people in WhatsApp use the service in order to message businesses, Messenger is, I think, more people-to-people today. We’re working on a lot of different things that make it so that people can get value from interacting with businesses. We launched some of them at F8. We have a number of other things that we’re working on across Messenger and WhatsApp. But the long term bet is that by enabling people to have good organic interactions with businesses, that will end up being a massive multiplier on the value of the monetization down the road when we work on that and really focus on that in a bigger way. So we’d ask for some patience on this to do this correctly, and the game plan will be more similar to what we did in Facebook with News Feed.

Businesses are well aware of the game Facebook has played with News Feed. They got used to being able to reach fans for free, but were eventually faced with the harsh reality that they would have start paying to reach larger amounts of those same fans (who had, by the way, explicitly indicated they wanted to receive content from those Pages).

With organic reach in News Feed, Facebook has played the whole thing off as happening because of increase competition for getting in front of users in the News Feed. This makes sense to an extent, but it remains to be seen if they’ll be able to keep that argument for Messenger once they get businesses hooked on the free aspect and then start charging. Messenger just doesn’t work the same way as News Feed. It’s going to be very interesting to see how this plays out.

The things that Facebook introduced at F8 that Zuckerberg was referring to include the developer platform, which opens up a lot of potential opportunities for businesses that can create engaging experiences that users want to interact with.

The company also announced Businesses on Messenger, which enables users to interact with businesses through the app, kind of as a replacement for email. Users have to opt in for businesses to be able to message them. If they do so, businesses can send them personalized updates and talk to them in real time. They can provide customers with the ability to opt in for this on their website. The offering can be used for order confirmations, shipping updates, etc.

It remains to be seen whether or not people actually want to engage with businesses via Messenger. There is something to be said about being able to get customer support in real time, and like Zuckerberg said, they’re already seeing some of this with WhatsApp.

As Messenger’s David Marcus explained in the F8 keynote, it does have the potential to make the customer service aspect more convenient as the company already has all of the relevant information about who you are and what you bought right from the get go. Everything takes place in the same discussion thread as your receipt.

As we’ve seen numerous studies show recently, businesses are pretty bad at customer service on Facebook, and this is one potential path to improvement in that department.

We’ll have to wait and see what these other things Facebook is working on with Messenger include. The product recently became available to anyone with a phone number, opening up potential growth among non-Facebook users. It also has a new feature that lets people send money to one another, and the company is said to be working on a shopping-focused personal assistant feature within Messenger.

What would you like to see Facebook add to Messenger to let businesses get more out of the tool? Let us know in the comments.

Image via Facebook

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