As the role of programmatic buying and selling in digital advertising continues to grow, issues surrounding viewability and verification are moving to the forefront. This white paper looks at the current state of and future prospects for programmatic in a digital ad industry increasingly defined by viewability and verification. Brought to you by RhythmOne.Learn more
At this week's Mobile World Congress in Barcelona, the mega-event for all things mobile, the rapid rise of messenger apps surely will dominate conversations following Facebook's deal to acquire WhatsApp for a staggering $16 billion. This comes just after news that Japan's Rakuten is acquiring Viber, another messaging app, for $900 million.
The deals signal a shift that's fast changing mobile, as messaging apps evolve into platforms. Deloitte forecasts that in 2014, these services will deliver some 50 billion messages a day globally, as against 21 billion SMS messages. User numbers have climbed quickly for a crop of these services, with WhatsApp out ahead with 450 million monthly active users; more than 70 percent of them are active on a given day. South Korea's Line reports more than 350 million registered users, Viber and China's WeChat are closing in on 300 million.
At last year's Mobile World Congress, Viber's CEO Talmon Marco brashly told mobile operators that they only had themselves to blame -- having failed to innovate with SMS messaging -- for the revenue that messenger apps were suddenly stealing away. Indeed, mobile consumers have plenty of incentive to use messaging apps: Because they bypass the mobile operator, there's little or no cost to users. They also let people communicate in multiple ways -- benefiting from and helping to drive a trend toward a more visual communication culture -- and some also serve as social networks, gaming outlets and even commerce hubs.
As they expand their services, the apps are becoming an "alternative distribution channel," as Reuters puts it, or a quasi-operating system. Kik, for example, now features a built-in browser, allowing friends to surf the Web simultaneously. Rakuten will combine its e-commerce platform with Viber's messaging system. The more that these services enable users to do within the app, of course, the more data they can collect and, potentially, sell to advertisers.
For marketers, messenger apps usher in another opportunity to integrate into the fabric of consumers' mobile activity. In some markets, users are already spending much of their mobile time within these apps. One China-based WeChat user, a venture partner at 500 Startups, writes that she opens the app roughly 50 times a day; a cosmetics marketer tells The New York Times she spends hours a day in the app.
WeChat, owned by Tencent, may prove a model for how messaging apps can expand into platforms. It has a payment function and is integrated with Tencent's e-commerce platform, Yixun. Users can do everything from book taxis to invest in financial products, and Tencent is reportedly experimenting with new capabilities like using the app as a remote control. Last week Tencent announced a 20 percent stake in Dianping.com, a service that combines elements of Yelp and Groupon, with plans to integrate it (and its merchant network) into WeChat.
WeChat is a friendly environment for marketers testing creative ways to engage users. As part of a "digital innovation" partnership with WeChat that Burberry announced last week, its Chinese fans were able to view the company's London Fashion Week women's wear show, personalize digital versions of runway pieces and see exclusive content by texting Burberry. "The exciting thing for us is the deeper and more meaningful way that we are able to tell our stories using this platform," said chief creative director Christopher Bailey in a statement.
At a more basic level, marketers are diving into messaging apps with branded stickers -- available for everything from Hello Kitty to the FC Barcelona team -- and creating branded profiles. Line, for instance, offers the Plus Friends platform for brands and celebrities; users can add these accounts to their contact list, then see updates in the chat dialogue format.
During a recent webinar on mobile trends, Forrester's Julie Ask noted that some Chinese ad agencies are recommending that brands embed micro-apps into WeChat, rather than launch stand-alone efforts. Ultimately many marketers will have to migrate to these platforms, as she explains in her blog: "Not every brand will earn a spot or be able to manufacture a mobile moment with me through an app on my phone. Brands are going to have to 'borrow mobile moments' by engaging with consumers on third-party platforms."
By evolving into a mini-hub for much of a mobile user's daily activity, messenger apps may solve some of the difficulties brands have faced in figuring out their place in the mobile ecosystem.