Facebook has reportedly abandoned its plan to introduce ads to messaging service WhatsApp this year.
The social media giant, whose revenue is completely dependent on advertising, has disbanded the team in charge of integrating ads into WhatsApp, according to The Wall Street Journal.
Facebook is now reportedly rethinking its approach to generating revenue from the messaging platform, which it bought for US$19bn in 2014. As well as charging a $1 subscription fee in some regions (until 2016), Facebook had planned to monetise the popularity of WhatsApp through advertising.
Instead, Facebook will now focus on features that allow businesses to communicate with customers and organise those contacts, the WSJ reported, quoting an unnamed source.
WhatsApp, which has an estimated 1.6 billion monthly active users worldwide, has made privacy an essential part of its brand and uses end-to-end encryption when people send each other messages.
However, this private environment makes monetisation difficult: users have long used the platform without the intrusion of ad formats, while advertisers are not given access to in-depth user data that would allow for ad targeting.
Mobbie Nazir, chief strategy officer at We Are Social, told Campaign: "Partly the environment on WhatsApp isn't right for ads – but that's similar for all social media, where people go to connect with their friends and family, not to be sold to. This issue of advertising on social platforms is a challenge – but brands should see WhatsApp's move as a good thing, a reminder that we can't just pay to get attention. It forces us to think about the value equation.
"Whatever WhatsApp's intentions are with advertising, there's still plenty of ways for Facebook to start to recoup its investment – metered access to the platform, building e-commerce capabilities or monetising WhatsApp data through its other platforms, for example.
Nevertheless, in November 2018, WhatsApp confirmed that it would soon allow companies to purchase ads within WhatsApp Status, its version of Stories, the short-form content stream format found on Instagram and Snapchat.
Facebook was unable to immediately respond to a request for comment from Campaign.
(This article first appeared on CampaignLive.co.uk)