Facebook Struggling To Monetize Messaging

Ahead of Facebook’s fourth-quarter earnings report on Wednesday, analysts are reflecting on the tech giant’s recent successes and failures.

Among other issues, analysts say, Facebook is struggling to monetize its messaging services (like WhatsApp and Messenger) as quickly as was once expected.

“Facebook continues to roll out ways for businesses to market on its messaging apps, and last week it launched a test of advertising on Messenger,” according to eMarketer principal analyst Debra Aho Williamson.

“However, although Messenger is widely used … consumers have been slow to warm up to the idea of interacting with chat bots and paid advertising in messaging applications,” Williamson cautions.

By eMarketer’s estimate, 39.6% of U.S. Web users will send or receive a message via Facebook Messenger this year.

“Meanwhile, Facebook has faced scrutiny in Europe over its plan to merge data from WhatsApp with data from Facebook,” Williamson notes. “These scenarios tell me that generating significant ad revenue from Messenger and WhatsApp is still a ways off.”

This year, Facebook will generate $33.76 billion in total digital ad revenue -- up 30.2% over last year -- eMarketer expects.

In 2017, 45% of Facebook's total ad revenue will come from the U.S., while it will capture 14.7% of the worldwide digital ad market -- making it the second ad publisher behind Google, which has a 31.7% worldwide share.    

Meanwhile, Facebook will net $29.71 billion in mobile Internet ad revenue globally -- up 35.2% from last year -- eMarketer predicts.

Overall, Facebook will capture 20.7% of the worldwide mobile ad market, by eMarketer’s reckoning.

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