Facebook to Drop WhatsApp Subscription Fee

It's a win-win solution.

Hey Facebook users, it’s time to rejoice!

Facebook Inc.’s WhatsApp messaging service is about to change the way we chat via social media. That’s because they’ve decided to drop WhatsApp’s annual $0.99 subscription fee.

Why is summed up in one magical word for all digital PR experts and social media companies alike — monetization.

With most marketing tech companies, there is a metric called ‘Cost Per Customer’ or more commonly ‘Cost Per Acquisition’.

CPA is calculated by dividing the cost of advertising by the number of leads or customers for a given period of time. In other words, there is a considerable amount of cash to be made with every download, and Facebook is pretty good at figuring out just how much.

By introducing third-party ads, much like your popular apps that you play during downtime at your desk, WhatsApp hopes to discover ways to get those users to do other things with the app.

As WhatsApp stated originally, Facebook noted the original reason for charging users was to keep the user experience “ad-free.”

That leaves WhatsApp with no apparent way to monetise its 900 million monthly active users. One argument is that it doesn’t necessarily have to: it’s owned by Facebook, after all. But the more likely path to revenue is contained in the second half of its announcement:

Naturally, people might wonder how we plan to keep WhatsApp running without subscription fees and if today’s announcement means we’re introducing third-party ads. The answer is no.

Starting this year, we will test tools that allow you to use WhatsApp to communicate with businesses and organizations that you want to hear from. That could mean communicating with your bank about whether a recent transaction was fraudulent, or with an airline about a delayed flight.

We all get these messages elsewhere today – through text messages and phone calls – so we want to test new tools to make this easier to do on WhatsApp, while still giving you an experience without third-party ads and spam.

Again, why? Another number — 91, as in percent.

That’s how much time spent on mobile phones is used to access messaging apps.


Source: Reuters via Yahoo!