Mashable posed a question in one of its articles, "Are Ads Coming to Messaging Apps?" The article comes to the conclusion that many, like WeChat (over 400 million users), What'sApp (over 300 million users), Viber (200 million users), and KaKaoTalk, are not interested in putting ads on their platform.
Separately though, Snapchat's Co-founder and CEO Evan Spiegel, does seem to be interested in advertisting as he expressed at a conference in September 2012. Currently, Snapchat is not generating revenue, but they have been working on its business model as they try to raise more funding and hope to start generating revenue before its next round of financing. Snapchat most recently raised $60 million at a $800 million valuation and is next looking to raise up to $200 million at a $3 to $4 billion valuation. In fact, Snapchat reportedly turned down Facebook's offer to be acquired at over $1 billion. Facebook seems to be trying to corner the photo-sharing market as its Snapchat offer comes after its acquisition of Instagram valued at $1 billion. Snapchat is not intersted in selling itself though.
So, why aren't the other messaging platforms intersted in advertising? It's because they have other revenue generating strategies. For example, several messaging apps charge users to install the app. Also, there's a huge B2B component to their revenue generation - KakaoTalk charges brands fees starting at $20,000 to use their PlusFriends service to connect with users and accounted for 26% of their $46 million in revenue last year. WeChat also has revenue-sharing partnerships with brands like McDonalds, where users can make real-time purchases through the app. These brands likely have to pay to get on their platform.
The article brings up a good point - today, mobile users have less and less network loyalty, and therefore it's too easy for ads to ruin the experience for a user. Many of these messaging apps already have millions of users, and they won't want to risk losing users over poor experience.
It will be interesting to see how Snapchat proceeds given the strategies that its global counterparts have opted to take.
Source:
http://blogs.wsj.com/digits/2013/10/25/snapchat-mulls-raising-money-at-3-4-billion-valuation/
http://mashable.com/2013/10/26/facebook-snapchat/
http://mashable.com/2013/10/18/messaging-app-ads/
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