OPINION: Why messaging apps really are the next big thing

Matt Bowden
By Matt Bowden | 27 November 2013

The news that Facebook recently made a cash offer to buy Snapchat for $3bn was a shock to many but considering the rising exuberance for social media and other mobile messaging services perhaps the only real shock was that Snapchat turned Facebook down. However, when you compare this to the recent Twitter IPO, which is currently an unprofitable organisation that is valued somewhere in the region of $25bn and that Instagram’s acquisition ended up being less than $1bn, perhaps Snapchat were right to hold out.

For those of you who are over 21, Snapchat is a wildly popular mobile app that lets users communicate by sending each other photos which automatically delete after a few seconds. Whilst they haven’t released any official download numbers, Snapchat said in September that its usage had nearly doubled to 350 million messages or “snaps” per day, up from 200 million in June 2013.

It’s fair to make the same comparison with other messaging apps like WeChat, KakaoTalk, Line and WhatsApp, the later having more than 350 million monthly active users globally. Those numbers make Whatsapp bigger than Twitter and a quick (unscientific) look on Google Trends suggests that Whatsapp messaging is actually surpassing worldwide SMS volumes.

Why so popular?

Well firstly, some of the popularity of these apps seems to stem from Facebook fatigue where younger users are spending less time on Facebook (outlined in the recent Facebook announcement that they were seeing a ‘decrease in daily users, specifically among teens’) due in the most part to mums and dads (and grannies and grandads) joining Facebook and spamming their teenagers walls with inspirational quotes and images of cute animals, and (shock, horror) commenting on their kids' photos.

However, there’s more to this than just hiding what you’re up to from your parents. These messaging apps allow you to have instant (group) conversations and share photos with your peers, in a much more personal way.

So, how do these messaging apps make money?

Well, in fairness Snapchat currently doesn’t and whilst advertising seems like the obvious channel, it’s not something that appears to be floating Snapchat’s boat. Instead, Snapchat are looking at the success of WeChat and Line, who are using in app payments to monetize their services.

In fact WeChat, Line, Kik and KakaoTalk are making most of their revenue via their gaming platforms with Kik’s ‘Costume Party’ game achieving one million downloads in under 24 hours and Line’s games platform hitting 150 million downloads in three months.

In addition to game downloads, both Line and WeChat have forged sponsorship packages with the likes of FC Barcelona, Real Madrid, Coca-Cola and even Lebron James, which allows consumers to access news, photo’s and videos and even download stickers of their favourite players to use in personal conversations with their friends.

What does this mean for brands and agencies?

Some brands have already dipped their toes in the water with the likes of Taco Bell in the US giving their consumers a sneak peek at the return of the Beefy Crunch Burrito via Snapchat.

Other brands can take advantage by leveraging the personal nature of this channel and monetizing the in app content opportunity or by innovating with things like personalised stickers and branded content. However, perhaps the most important thing that these apps can offer a brand is the ability to build a deeper connection with their consumers, taking the conversation from ‘one to many’ to ‘one to one’.

Despite what you may think about these apps, they’re not going to disappear any time soon – unlike the ephemeral images of Snapchat – and it’s the job of brands and agencies to find ways of mining this fertile channel. The consumers are already there in their millions. The next big thing is already here.

Matt Bowden
Senior digital strategist
Slingshot Digital