The WhatsApp founders came from a culture (at Yahoo) where engineer work was dedicated not to making the user experience better -- but instead, making ads more sellable by collecting more data. They left Yahoo and started WhatsApp with the condition that ads will never appear and no data will be collected.
Brian Acton and Jan Koum, the two founders who found a way for people to text-message without paying carriers text-messaging fees, have lived up to this promise to their users. In exchange for this ad-free “content experience,” users pay an annual fee to WhatsApp of 99 cents a year. WhatsApp currently has 400 million users who could not be happier with these two guys.
I am not a user (yet), but am incredibly amused by the juxtaposition between their ad-free success and what “we” say on sales calls and at industry conferences, about the value created for users by deflowering their personal data to provide useful and targeted ad messages.
WhatsApp’s success (it was just bought by Facebook for a cool $19 billion) says, “We’re kidding ourselves.”
WhatsApp’s success says, “We’re lying to our clients.”
WhatsApp’s success says what no one in our industry wants to hear: “Consumers don’t want to see ads, especially when they are looking at a mini computer they hold in their hands.”
The digital ad world will say, “Reading and responding to professionally published content is different than reading and responding to text messages.” The digital ad world thinks that users checking the weather, sports scores, playing games or reading social media don’t mind ads, especially if they are relevant. The digital ad world believes “consumers understand” that for this content to be free, they have to put up with ads.
WhatsApp’s success calls “bullshit.”
First off, is text-message content that much different from published-site content? Yes, it’s user-generated, but with much higher engagement rates. Second, isn’t reading and responding to “content” the story publishers tell advertisers about the experience users are having with their published sites? So even if we have to stretch a little to see this, user-generated text-message content and site-published content are both “content,” and currently 400 million people are all saying the same thing: not having ads interfere with a valuable content experience is worth paying for.
This is not a question about whether consumers will continue to tolerate digital advertising. I think the success of WhatsApp says consumers have drawn a line when it comes to tolerating ads in the palms of their hands.
Let’s look at online ads that appear on desktops (and laptops) for an honest moment. Beyond the occasional exception like the home-page buyout that ran on Politico.com yesterday promoting “House of Cards” -- which looked absolutely perfect -- desktop online display ads are often awful. Whether it’s the creative, the intrusiveness, or the abundance of them crammed onto one page, these display ads are not welcomed by consumers, despite precision targeting. But they are tolerated. Why? Because desktops computers remind consumers of their televisions and deliver an experience that often mimics reading a magazine, and both prior media experiences have trained consumers to accept ads.
When it comes to the mini computers that fit in our hands and are carried everywhere we go -- well, that’s where tolerating ads may come to an end. Those 400 million WhatsApp users are saying there is no room in our pockets for ads, and if you can deliver an ad-free mobile content service we value, we will reach into our pockets and pay.
Lost in the invariable hype this deal will generate is a message publishers should not ignore. Mobile ad growth is going to hit a cliff because consumers will not tolerate these ads -- and instead, will jump to ad-free pastures. Publishers should stop convincing themselves about the value they provide to their users by serving up relevant and targeted advertising on mobile devices. Instead, they should figure out how to provide an ad-free mobile content service so valuable, consumers will pay for it. A buck a year can add up pretty quickly.