Updated 20/08/24
Brand spending on WhatsApp is set for a shift. Brands will ramp up their investment in WhatsApp Business API from 2024 as they start to migrate their spend from A2P SMS over to two-way conversational, rich messaging.
Between 2019 and 2023, Mobilesquared data reveals that brands spent a cumulative total of $1.14 billion on the channel. However, between 2024 and the end of 2027, brands will spend a cumulative total of $38.61 billion.
In the first period (between 2019 and 2023), brands were spending an average of $626,462 per day, but over our forecast period (2024 to 2027), brands are projected to spend a daily average of $21.15 million. That is an increase in daily brand spend of 3,275%.
Mobilesquared is also projecting a major shift in brand spend as WhatsApp Business API evolves from a predominantly inbound, customer-care focused channel, to an outbound marketing and utility centric channel (i.e. conversational commerce).
In the first period, almost 40% of total spend by brands was on conversational services (i.e. customer care), and therefore a little over 60% of brand spend was on conversational commerce. Over our forecast period, conversational commerce will account for over 80% of brand spend.
One of the main reasons for this shift is the introduction of use cases by WhatsApp owner Meta in June 2023, but the primary shift can be attributed to Meta’s pricing model for conversations.
Pricing: WhatsApp Business API
When it comes to the WhatsApp Business pricing model, a brand is only charged the cost of 1 message regardless of the number of messages exchanged between a brand and consumer over a 24-hour period.
Mobilesquared believes this pricing model massively undervalues the power of the conversation from a messaging industry perspective, with brands willing to pay a premium for consumer interactions.
This pricing model could, of course, be a tactical ploy from Meta to incentivise brands to drive conversations over WhatsApp Business API in the short term, and then up the price once the value of the channel has been demonstrated.
For the time being, the fact brands are upping their spend on WhatsApp Business and will make it a billion-dollar channel in 2024, is an encouraging development.
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With nearly 3 billion users, WhatsApp is the largest rich messaging platform in the world, making it the ideal channel for enterprises and brands to engage with customers.
Our WhatsApp research provides detailed insight, analysis and forecasts on WhatsApp Business API.
Contact our analyst team for comments or insight by emailing nick@mobilesquared.co.uk.