Facebook’s mobile monetization strategy hasn’t always been clear.
But when we put it into the context of its recent acquisitions, statements made by Zuckerberg, and other news from around the tech world, we can come up with a few good ideas.
Facebook Monetization and Messaging Apps
Early in 2014, Facebook’s mobile monetization strategy was unclear to many.
After all, WhatsApp remains stolidly anti-advertising. The fact that Facebook paid $19 billion for this app, a relatively small startup with 450 million users, seemed shocking to many. Especially with the app’s inability to monetize via advertising.
And Facebook Messenger, Facebook’s mobile messaging app, had no clear monetization strategy.
Many still feel that Facebook’s fluctuating popularity numbers signify a decline. That decline, in turn, would cause the company to go the way of Myspace.
While Facebook has yet to monetize its messaging apps, other apps have set precedents:
KakaoTalk – This Korean app also serves as a portal for games. And KakaoTalk generates commissions on sales of its games.
LINE App – Japan’s most popular messaging app, LINE, also generates commissions on its games, through emoticons, and through a number of marketing deals made with celebrities. While LINE has become something of a cultural phenomenon, it’s unlikely that the same type of model would translate directly into the West.
Snapchat – Snapchat, the messaging app that refused to be bought out by Facebook, eventually introduced ads as a monetization strategy.
So while Facebook has yet to reveal its mobile monetization strategy for its popular messaging apps, there are clearly precedents. Even if Facebook’s Whatsapp continues to refuse ad-based revenue, there are other precedents that would give Facebook other revenue options.
Whatsapp’s current subscription-based revenue model could easily be supplemented with other premium services or in-app purchases.
Facebook Messenger, likewise, could generate income through any of the above-mentioned models, from ads to in-app purchases of games, emoticons, and so on.
It’s worth noting that Instagram has also turned to ads to generate income. Facebook’s own photo-sharing platform recently debuted carousel-style, image-based ads. Though Instagram isn’t considered a “messaging” app, as we’ll see below.
From Facebook Pay to the Find and Oculus Rift
Facebook’s recent plays suggest that it wants to become more than just a social network:
Facebook recently released a feature for Facebook Messenger that allows friends to send each other money.
Naturally, Facebook isn’t offering this convenience out of the goodness of their hearts. Speculation is rife that the company wants to compete with PayPal, Apple Pay, Google Wallet, and other digital payment options. Currently there are zero transaction fees, but that could easily change in the future.
Coupled with its digital payment system, Facebook’s acquisition of TheFind implies a major move into digital retail.
Just last month, Facebook acquired TheFind, a comparison shopping engine that crawls retail products. The comparison shopping platform gives Facebook the ability to provide targeted, local shopping to users around the world.
Facebook stated that TheFind would enhance its commerce ads: the engine would better match companies to users and make sure that that user would be more likely to buy an ad.
With a vast store of up-to-date information on users’ locations, interests, shopping habits, surfing habits, and more, Facebook already has an enormous store of data it can use to exploit local retail.
Facebook is also using multi-product ads to reach into the mobile space.
Recently, Facebook has decided to test new carousel-style ads on both Facebook and Instagram. Facebook’s ads are designed specifically for retailers, again suggesting that Facebook wants to make a big move into the retail space.
While Amazon clearly has its own market share locked in, Facebook stands a good chance of locking out competitors such as Google.
Facebook’s Oculus Rift is poised to dominate in a new era of shopping.
Oculus, acquired by Facebook for $2 billion, is at the forefront of virtual reality. While gaming is one of the most obvious and anticipated uses of this technology, shopping comes in close behind.
In a recent Walker and Sands study, 2 out of 3 survey respondents stated that they would like to shop with Oculus. And almost 1 out of 3 consumers stated they would probably shop more online if they could use virtual reality.
Though Oculus Rift’s current VR headset isn’t exactly mobile technology, the company is releasing other mobile-friendly headsets, such as the Samsung Gear VR. To use this headset, a person simply needs to slide their Samsung smartphone into the headset. Like Google Cardboard, it offers any smartphone user an easy way to experience VR – no matter where they are.
Beyond Mobile Monetization
Facebook’s mobile monetization strategy is clearly a long-term plan with many moving parts. But even a quick look at Facebook’s recent activity makes it clear that the company has a long-term vision that extends far beyond monetizing its current mobile apps.
In October, Zuckerberg even came out with his future plan for Facebook monetization. He stated that once his major companies – such as Instagram, WhatsApp, and Oculus – exceeded 1 billion users each, then he would begin to aggressively monetize them.