Facebook parent Meta has seen its revenue from Click-to-Message ads in India double year-over-year (YoY), CEO Mark Zuckerberg said in a call with analysts on October 26, highlighting the growth opportunity of business messaging for the social networking giant. Zuckerberg also said that more than 60 percent of WhatsApp users in India message a business app account every week. However, he didn't disclose any further details on the revenue generated from these ads or specific details on the number of users engaging with business accounts in the country.
India is the biggest market for WhatsApp with over 500 million users. In February 2023, Zuckerberg had said that Click-to-Message ads had reached a $10 billion revenue run-rate globally. Moneycontrol had previously reported that the app is set to hit revenue of $1 billion in India by the end of 2023.
During the earnings conference call on October 26, Zuckerberg said he believes business messaging will be the next major pillar for the company's business with more than 600 million conversations happening between people and businesses every day on their platforms.
Over the past year, Meta has made a big push to monetise its most expensive acquisition, WhatsApp, by ramping up its business offerings and India has been a key market for driving growth.
New revenue sources
Last month, Zuckerberg unveiled a slew of business messaging-focused product features including in-chat payments and enabled businesses to create customised experiences for customers through WhatsApp Flows at its global Conversations event held in Mumbai.
“India is leading the world in terms of how people and businesses embrace messaging” Zuckerberg, who joined the event virtually, had said at the time.
In June, Meta also allowed users of its WhatsApp Business app to create Click-to-WhatsApp ads for Facebook and Instagram without needing a Facebook account.
Business messaging has become strategically important for the social networking giant over the past year or so, as it looks to diversify revenue sources beyond traditional digital advertising that took a significant hit in 2022 due to the economic downturn and impact of Apple's iOS privacy policy changes.
During the call, Zuckerberg also bet on its new AI experiences to attract more businesses on its platform.
New launch
Last month, Meta unveiled AI Studio that enables people to create and interact with lots of different AI characters across its platforms. It will also allow businesses to create AI characters that reflect their brand’s values and improve customer service experiences across their apps.
Zuckerberg said they have launched the offering in alpha with select businesses and will roll out more broadly in 2024.
"Making business AIs work for more businesses is going to be an important focus for us into 2024" Zuckerberg said on the call.
Zuckerberg pointed out that the majority of commerce over messaging is currently happening in countries where the "cost of labor is low enough that it makes sense for businesses to have people corresponding with customers over text".
"But in lots of parts of the world, the cost of labor is too expensive for this to be viable. With business AIs, we have the opportunity to bring down that cost and expand commerce in messaging into larger economies across the world," Zuckerberg said.
Meta CFO Susan Li said on the call that they witnessed strong revenue growth from business messaging during the quarter. This drove growth in its "Family of Apps other revenue" segment, which houses the company's non-advertising revenue sources from its suite of apps.
Family of Apps other revenue was at $293 million in Q3, up 53 percent YoY. Meta reported an overall revenue of $34.1 billion for the quarter, registering a 23 percent increase YoY while the net income jumped 164 percent to 11.6 billion for the quarter.
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