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Facebook Backs Off on Plan to Bring Ads to WhatsApp

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In a deviation from its normal monetization strategy, Facebook is reportedly reversing course on its plans to insert ads into messaging platform WhatsApp.

According to The Wall Street Journal, Facebook is re-thinking it’s approach to WhatsApp as a revenue-generating tool:

“WhatsApp in recent months disbanded a team that had been established to find the best ways to integrate ads into the service, according to people familiar with the matter. The team’s work was then deleted from WhatsApp’s code, the people said.”

That would mean that while WhatsApp has more than 1.5 billion users, it won’t be contributing significantly to Facebook’s overall revenues anytime soon.

Facebook purchased WhatsApp for $19 billion back in 2014 with a view to expanding its global empire, and tapping into the platform’s popularity in order to build another huge revenue pipeline for the company. At that time, WhatsApp was generating around $20 million p.a. by charging a $1 per year subscription fee in certain regions, but the company removed subscription fees in 2016, which most saw as part of a larger shift towards coming monetization plans from Facebook – i.e. ads in your message streams.

But monetizing messaging is not so easy, especially on WhatsApp, which has long made user privacy a focus, particularly through elements like end-to-end encryption as standard. 

Without access to in-depth user data, and with ads being more intrusive in private messaging streams, Facebook hasn’t been able to establish a clear way forward for WhatsApp monetization, while conflicts over potential ad targeting reportedly lead to WhatsApp founder Jan Koum leaving Facebook back in 2018.

Following Koum’s departure, it did seem as though WhatsApp ads were inevitable. In November 2018, WhatsApp confirmed that it would soon allow companies to purchase ads within WhatsApp Status, the platform’s own variation of Stories.

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That report was re-iterated in several presentations to potential advertisers over the last year, but now, even Status ads are being shelved.

As per WSJ:

“For now, the focus is on features [which allow] businesses to communicate with customers and organize those contacts, said one person familiar with the matter.”

As noted, this conflicts with Facebook’s documented approach to app monetization, which CEO Mark Zuckerberg outlined back in 2016.

At Facebook’s annual stockholder meeting in that year, Zuckerberg said that Facebook follows an established three-stage process for monetization:

  1. Build a product that people love
  2. Facilitate organic business behavior on the app (free of charge)
  3. Prove additional avenues for businesses who are seeking to expand their reach and presence

This latest update would suggest that WhatsApp remains stuck on step two, which is where it was at back in 2016, and seems likely to be stalled on for some time yet. 

The logical focus, then, will likely be on WhatsApp Pay and facilitating eCommerce in the app. Back in August, reports indicated that Facebook was in talks with regulators and potential business partners in both India and Indonesia in order to facilitate the arrival of WhatsApp Pay in both markets. These two regions have a combined WhatsApp user base of 500 million, and this would appear to be where Facebook is likely to derive the most revenue potential from the messaging platform, at least in the immediate term.

Building on this, last June, Facebook acquired Indian eCommerce platform Meesho, which connects sellers with customers on WhatsApp, as well as other social platforms.

Meesho

Through the expansion of WhatsApp Pay, and expanded investment in eCommerce providers like Meesho, Facebook could still create a broader business eco-system within WhatsApp, and eventually, generate revenue through either payment facilitation fees or targeted messaging options from previous customers who’ve agreed to receive such. 

There’s likely a range of options to consider in this respect, and with Facebook backing down on its traditional advertising approach, it may suggest that it’s confident that such alternatives will end up paying off significantly. 

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So, no ads in your WhatsApp streams, which seems like a good move, and one that will please WhatsApp users. But expect Facebook to ramp up its focus on payments and eCommerce as a result.

Socialmediatoday.com

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5 Effective Ways to Run Facebook Ads A/B Tests

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Facebook Ads A/B Tests or split tests help them try different versions of ads with various campaign elements. This process helps them arrive at the best version for the organization’s target. 

A/B Tests offer a vast pool of resources to try out various versions. You may get caught up and lose your way to arriving at the best version in a limited time. To better understand this topic you can read the Facebook ad testing guide. Here are five effective ways to run Facebook Ads A/B Tests-

1) Start with the minimal number of variables

This approach will help you analyze the impact of a variable much better. The lesser the variables, the better will be the relevant results and more conclusive. Once you have various versions, you will need to run them through the A/B Significance Test to determine if the test results are valid.

2) The second way is to select the correct structure. 

There are two structures in A/B tests. One is a single ad test, and the other is multiple single variation ad sets. All the variations will go under one ad set in the first structure. Each variation will be under a separate ad set in the second one. Out of the two, the second one works out to be better and gives better results.

3) Use of spreadsheets is important to stay organized. 

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These spreadsheets help collect and analyze data to get meaningful insights and arrive at data-backed decisions.

4) Do target advertising and set realistic time goals. 

One approach is to choose an entirely new set of audiences. Also, the data pool should be vast and not the same as some existing campaigns. The reason for choosing a different audience is that Facebook may mix up your ads and give contaminated output. 

Another approach to choosing the right audience is to pick geography. It works better, especially when you have business in a particular region.   

It’s also essential to set a realistic timeline for your testing. Facebook suggests one should run a test for at least four days, but you can choose to run the test for up to 30 days.   

5) Set an ideal budget. 

The concept of a perfect budget is subjective. But, you can fix it yourself, or Facebook can do that for you based on your testing data. A large part of the test budget is spent on avoiding audience duplication. If the same audience sees variations, it could affect the test results.

Besides these top five effective ideas, you will need to take a few more action points to make the testing process efficient. Make sure you put the website’s domain link and not the landing page link in the ad, as that doesn’t look good. Put appropriate Call To Action Button, such as ‘Learn More,’ ‘Buy Now,’ etc. It’s also important to see how your ad is coming across on various electronic gadgets- mobile, tablets, etc.

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Another strategy that works is trying to engage the customer. You may add social engagement buttons such as ‘Like’ or ‘Comment.’ Use high-resolution images as they work better with the customers. Low-quality, highly edited images are often not liked and trusted by the consumers.

You can learn more about the audience behavior patterns with A/B test results. Conducting these tests on Facebook streamlines the entire process and makes it smooth for you. With the test results, advertisers and marketers can work on the creatives they need to utilize.

To sum it up, you can run an effective A/B test campaign within the specified budget. You don’t need to spend massive amounts to get your advertisement right. You’ll make the correct assumptions about the performance of variations with a good understanding of business and consumers.

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