Facebook’s parent company, Meta, has reported significant growth in revenue from Click-to-Message ads in India, with a year-over-year doubling of earnings. Mark Zuckerberg, Meta’s CEO, announced this news during an analyst call on October 26, underlining the promising prospects for business messaging within the social networking giant. Although specific figures on ad revenue and user engagement weren’t disclosed, it’s clear that India’s market for WhatsApp is a focal point for Meta’s expansion efforts.
WhatsApp’s Dominance in India
India, with over 500 million users, stands as the largest market for WhatsApp. In February 2023, Zuckerberg announced that Click-to-Message ads had achieved a global revenue run rate of $10 billion. Reports suggest that WhatsApp is poised to reach $1 billion in revenue in India by the end of 2023.
The Rise of Business Messaging
During the same earnings conference call, Zuckerberg expressed his belief that business messaging will be the next major growth pillar for Meta. Currently, more than 600 million conversations occur daily between people and businesses on Meta’s platforms. Over the past year, Meta has been diligently working to monetise WhatsApp, its most significant acquisition, by enhancing its business features. India has emerged as a vital market in this strategy.
Product Features to Boost Business Messaging
Meta’s CEO recently unveiled several product features focused on enhancing business messaging. This includes in-chat payments and enabling businesses to create custom experiences for customers via WhatsApp Flows. These features were unveiled during a global Conversations event held in Mumbai, showcasing Meta’s dedication to serving the Indian market.
The Importance of Business Messaging for Meta
Business messaging has gained strategic importance for Meta in the past year, as the company seeks to diversify its revenue sources beyond traditional digital advertising. This move was prompted by the economic downturn and the impact of Apple’s iOS privacy policy changes, which affected digital advertising.
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AI’s Role in Business Messaging
Meta is also banking on the power of AI to attract more businesses to its platform. The company recently introduced AI Studio, which allows users to create and interact with various AI characters across its platforms. Additionally, businesses can use AI characters to reflect their brand’s values and enhance customer service experiences across their apps. This innovation will be launched more broadly in 2024.
Reducing Labour Costs with Business AIs
Zuckerberg emphasised that most commerce over messaging is currently prevalent in regions where labour costs are low enough to make it feasible for businesses to engage with customers via text. However, with the introduction of business AIs, Meta aims to reduce these costs and expand commerce in messaging to larger economies worldwide.
Strong Growth and Positive Financial Results
Meta’s Chief Financial Officer, Susan Li, highlighted robust revenue growth from business messaging during the quarter. This growth contributed to the company’s “Family of Apps other revenue” segment, which encompasses non-advertising revenue sources from its suite of apps. In Q3, this segment reached $293 million, marking a 53 percent year-over-year increase. Meta reported overall revenue of $34.1 billion for the quarter, showing a 23 percent YoY increase, and its net income surged by 164 percent to $11.6 billion for the same period.
Meta’s growth, particularly in the context of business messaging and AI, is positioning the company to further diversify its revenue sources and strengthen its presence in one of its most significant markets, India. With WhatsApp at the forefront of these efforts, Meta is capitalising on the evolving dynamics of digital communication and commerce in a fast-growing digital market.
