15 billion traffic monetization supports AI gamble! Meta's WhatsApp introduces advertising and paid subscription services for the first time

According to Zhitong Finance APP, Meta (META.US) announced that it will display advertisements in its instant messaging service WhatsApp, a move that will open up new revenue sources for the company to support its massive investments in artificial intelligence (AI) and other long-term projects.

Advertisements will appear in the "Status" section of WhatsApp, which is independent of users' inboxes and private conversations. Meta disclosed on Monday that this section, which has a daily visit count of 1.5 billion, will serve as an advertising display area for the "Status" feature (the WhatsApp version of temporary stories). Advertisers can also pay to promote their WhatsApp channels, giving them prominent placement in the Status section. The channel feature allows brands or celebrities to publish content to their followers, similar to mass email campaigns.

Alice Newton Rex, Vice President of WhatsApp Products, stated in an interview that as part of the advertising initiative, channel operators will be able to sell subscription services, providing exclusive content to paying users. The platform will not take a cut of subscription revenue initially, but plans to charge a 10% fee in the future.

It is understood that this year, Meta has made aggressive investments in the AI field, including optimizing large language models that support generative AI capabilities. According to insiders, the company recently acquired a 49% stake in AI data labeling startup Scale AI for $14.3 billion. These expenditures have put growth pressure on its core advertising business, necessitating continuous revenue generation to support AI expansion.

Since acquiring WhatsApp for $19 billion in 2014, Meta has spent years slowly building a monetization model that aligns with this private messaging service. Given the uniqueness of private inboxes, advertising has long been considered a poor fit. Meta has instead developed WhatsApp to meet the needs of small and medium-sized enterprises, focusing on digital payment and shopping features, especially promoting in overseas markets like India and Brazil, where WhatsApp dominates the messaging app landscape.

Although the payment feature has progressed slowly due to regulatory issues, Meta has already profited billions of dollars annually through "Click to Chat" ads on Instagram and Facebook (which direct users to chat with advertisers on WhatsApp). Businesses can also pay to reach app users who have opted to receive their direct messages.

A long-standing challenge for Meta is balancing revenue generation with user privacy protection. Its advertising products typically rely on users' personal information or browsing history for precise targeting, while WhatsApp employs end-to-end encryption technology. Co-founders Jan Koum and Brian Acton (who left in 2017 and 2018, respectively) promised never to insert ads.

Newton Rex emphasized that WhatsApp ads will only be targeted based on broad labels such as geographic location, language preferences, and followed channels, and will not integrate Facebook or Instagram data unless users actively link their accounts. "We will never insert ads into private conversations," she stated, "Users who only use the messaging function will not see ads at all." She added that while global ad placements have already begun, full coverage will still take time