WhatsApp Introducing Advertising Is a Potentially Lucrative but Risky Move

It reflects some economic logic, but also challenges assumptions many users have about their private digital spaces.

- Yusuf Oc and Janina Steinmetz

The decision to start advertising on WhatsApp marks a major shift for a private messaging service that has long positioned itself as being different from other social media platforms.

Back when Meta (then known simply as Facebook) bought it in 2014 for US$19 billion, WhatsApp had an unusual and simple business model. Users were required to pay a very small annual fee (US$1) in return for a minimalist, ad-free experience.

That fee was scrapped in 2016, and WhatsApp became fully free. But it always had the potential to eventually align with Meta's wider operation of offering free services for users to connect to others – while making money from targeted advertising.

Since then, WhatsApp has taken slow, deliberate steps towards making money. These strategies relied on income from businesses, which paid to use WhatsApp as a way of communicating with their customers.

By 2024, over 700 million businesses were using a separate version of the app called WhatsApp Business for customer service replies or promotional updates. Brands including Zara and Adidas use WhatsApp to send order updates, respond to queries and offer personalized shopping assistance.

But this is still a limited revenue stream compared with the massive ad-based profits Meta generates elsewhere. Estimates suggest that WhatsApp brings in only a tiny fraction of Meta's US$160 billion (S$206 billion) annual revenue, most of which comes from Facebook and Instagram.