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WhatsApp introduces ads in its app

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Re: WhatsApp introduces ads in its app

#81
post #64

Earlier quoted context omitted.

I’d love to know the expected ad revenue per user for makers of apps like WhatsApp, Instagram. I’m pretty convinced I’d pay 10x or more than that amount for a completely ad free version but I can’t be sure.

I'm not sure if the number was for Facebook specifically or all Meta apps, but they did quote a number of around $70 revenue per year per US user a while ago. (with (much) lower numbers in other parts of the world)

That’s interesting, thanks

Re: WhatsApp introduces ads in its app

#82
post #8

Does anybody have stats on how many people are O.K. paying for their core services, i.e. how many people pay for paid personal e-mail services? I just don't want to believe that our services have to be paid for through proxy by giving huge cut to 3rd parties. The quality goes down both as UX and as core content, our attention span is destroyed, our privacy is violated and our political power is being stolen as conten…

I’d love to know the expected ad revenue per user for makers of apps like WhatsApp, Instagram. I’m pretty convinced I’d pay 10x or more than that amount for a completely ad free version but I can’t be sure.

Don’t underestimate how expensive ads are and thus how much money they can bring in. Marco Arment, the developer of Overcast podcast player, has made remarks in the past about how the ad-supported version is completely viable and may actually make him more money per user than the price of his paid option. In his case, he runs his own contextual ad system. Obviously Meta is in a completely different league in terms of sophistication, meaning they are probably able to sell more targeted ads which means more money, and they also have the luxury of not having to pay any middlemen since they own their own ad infrastructure as well.

Part of me thinks the reason why they don’t offer that paid ad-free version of Facebook (which they built to try and appease the EU regulators) in the US is because their ARPU is so high that people would laugh at the price “Facebook/IG Premium” would have to cost.

Also, don’t forget that at least for now, paid subscriptions to social media apps would need to pay a 30% rent to the platform owner duopoly. This means that the price it would be it would cost would need to be 42% above than its ad ARPU just to break even.

Re: WhatsApp introduces ads in its app

#83
post #14

Earlier quoted context omitted.

I don't know, I expect it to be at least %3 as this is the general conversion rate for "free" users AFAIK. There must be some some number that makes it viable to have free users and paid users. For games, the free users are usually those who provide the "content". People usually demonize freemium games but IMHO its much more benign than extracting huge sums by artificially making it worse and sell attention.

you're being too generous, as if people were on whatsbook because of a value they get. they are just there for the captive network effect, which will take a hit the second or becomes a freemium or ad ridden service.

Yeah, nobody uses Instagram, TikTok, Facebook, or Google anymore now that they’re “ad-ridden”

Re: WhatsApp introduces ads in its app

#84
post #64

Earlier quoted context omitted.

I’d love to know the expected ad revenue per user for makers of apps like WhatsApp, Instagram. I’m pretty convinced I’d pay 10x or more than that amount for a completely ad free version but I can’t be sure.

I'm not sure if the number was for Facebook specifically or all Meta apps, but they did quote a number of around $70 revenue per year per US user a while ago. (with (much) lower numbers in other parts of the world)

These numbers are actually kinda interesting, in that they're based on user location, not advertiser. So basically all global companies target the US first because it's a big market with consistent regulations and mostly one language (compare to the EU where you'd need English/German/French/Spanish/Polish and still would miss a lot).

So, those numbers reflect a capital inflow to the US market rather than (as many people think) absurdly high conversion US users.

Meta stopped reporting user numbers/CPMs by geography after the market freaked out when user growth plateaued in the US (because they'd acquired basically everyone).

Re: WhatsApp introduces ads in its app

#85
post #8

Does anybody have stats on how many people are O.K. paying for their core services, i.e. how many people pay for paid personal e-mail services? I just don't want to believe that our services have to be paid for through proxy by giving huge cut to 3rd parties. The quality goes down both as UX and as core content, our attention span is destroyed, our privacy is violated and our political power is being stolen as conten…

This is only true if they introduce them. i.e. FB doesn't have a paid service, but obviously Youtube does. The problem is Whatsapp is a closed ecosystem so unlike email we can't just buy a provider. And I do pay for youtube. The experience is well worth it and I'm thankful I can afford it (it's not a lot but many can't).

“Can’t” is relative. I suspect there are a lot of people who pay for at least one streaming service that isn’t YouTube, but spend more hours watching YouTube in a month than they do watching that service. And of course there’s also the age-old comparison that if someone goes to Starbucks more than twice in a month, they probably spend more there than you would on YouTube Premium, and does that provide the person with as much value as YouTube does?

In my opinion, it’s rarely about “can’t” when we’re talking about 12 bucks a month or whatever. It’s about the psychology: when a free tier exists, people reframe it in their heads that paying for that thing is an extravagance. Relatedly, removing the free tier altogether also has dangerous effects, as people immediately jump to “I can’t believe you’re taking away the free thing I used to have” outrage, while nobody complains about not having free access to say, HBO.

Re: WhatsApp introduces ads in its app

#86
post #40
post #8

Does anybody have stats on how many people are O.K. paying for their core services, i.e. how many people pay for paid personal e-mail services? I just don't want to believe that our services have to be paid for through proxy by giving huge cut to 3rd parties. The quality goes down both as UX and as core content, our attention span is destroyed, our privacy is violated and our political power is being stolen as conten…

The trouble with charging people is you have to charge everybody the same[1], so you're leaving money on the table with wealthy users, and pricing out poorer users Ads mean each user 'pays' you according to their spending power Kinda socialist when you think about it! From each according from his ability... [1] Obviously companies try to get around this with price discrimination, but it's hard especially for a networ…

That is the absolute beauty of the targeted ad situation, isn’t it: you can generate leads for mortgages or expensive enterprise SaaS services, that are happy to pay super high acquisition costs, maximizing revenue from your rich users, and with the same ad inventory, maximize the revenue from your poor users by advertising App Store casino games for children, payday loans, etc. You can see why Meta doesn’t bother offering a paid service here.

Re: WhatsApp introduces ads in its app

#87

I think that kind of business model will screw them. Line has a more sensible one. For example if a business wants to message all its followers, they can only do so twice a month unless they start paying. So customers get an ad-free experience and can only receive ad messages from companies or accounts they follow.

Meta are already monetising business usage of WhatsApp in this way[1].

Any ads are in addition to this, not instead of.

[1]: https://developers.facebook.com/docs/whatsapp/pricing/

Re: WhatsApp introduces ads in its app

#88
post #34
post #8

Does anybody have stats on how many people are O.K. paying for their core services, i.e. how many people pay for paid personal e-mail services? I just don't want to believe that our services have to be paid for through proxy by giving huge cut to 3rd parties. The quality goes down both as UX and as core content, our attention span is destroyed, our privacy is violated and our political power is being stolen as conten…

I don’t have the actual stats, but, sadly, it seems like a gigantic chunk of the “i would rather pay a small fee to use a service rather than paying for it with exposure to ads” crowd is mostly all-talk. And I am saying this as someone who genuinely believes in the “small fee instead of paying with ad exposure” approach. The one specific example of this that made me think so is the Youtube Premium situation. So many…

> I don’t have the actual stats, but, sadly, it seems like a gigantic chunk of the “i would rather pay a small fee to use a service rather than paying for it with exposure to ads” crowd is mostly all-talk.

Depends on the price.

I'm guessing lots of folks are paying $1/month to Apple to upgrade from the free 5GB tier of iCloud storage to get to the 50GB tier.

WhatsApp charged people $1 per year before being acquired by Facebook:

* https://venturebeat.com/mobile/whatsapp-subscription/

Supposedly about a billion people paid for that at the time. Even if they went to $1 per month, that'd be fairly cheap (and WhatsApp ran fairly lean, personnel-wise: fifty FTEs).

Re: WhatsApp introduces ads in its app

#89
post #34
post #8

Does anybody have stats on how many people are O.K. paying for their core services, i.e. how many people pay for paid personal e-mail services? I just don't want to believe that our services have to be paid for through proxy by giving huge cut to 3rd parties. The quality goes down both as UX and as core content, our attention span is destroyed, our privacy is violated and our political power is being stolen as conten…

I don’t have the actual stats, but, sadly, it seems like a gigantic chunk of the “i would rather pay a small fee to use a service rather than paying for it with exposure to ads” crowd is mostly all-talk. And I am saying this as someone who genuinely believes in the “small fee instead of paying with ad exposure” approach. The one specific example of this that made me think so is the Youtube Premium situation. So many…

I know lots of people that pay for YT premium. Lots of people pay for Spotify too. I even pay for Kagi.

Re: WhatsApp introduces ads in its app

#90

> When Facebook bought WhatsApp for $19 billion in 2014, the messaging app had a clear focus. No ads, no games and no gimmicks. This sort of analysis is very surface-level I think. My impression is WhatsApp offered that by running on VC money and had no plan to run an actual business. That's not a question of focus. It's an unsustainable, please monetise me later land grab.

How was it unsustainable? As far as I know they were simply competent. They charged $1/year, so had ~half a billion in revenue, right? They probably could've bumped that to $2-$5/year with similar uptake. And they ran it with ~500 servers and 50 employees 12 years ago, so could probably do the same with ~50 or fewer servers today.
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