Facebook is turing to WhatsApp, Messenger and Instagram for revenue growth.
As Facebook is running out of places to put ads in News Feed, its core money maker, it is now turning to its other platforms – WhatsApp, Messenger and Instagram – for revenue growth. According to a report in ReCode, Facebook has determined that it can’t put more ads into users’ feeds without harming their experience.
“The industry term for this is ratio of ads to other content, called ‘ad load’, and Facebook says News Feed’s ad load is all maxed out hinting that its revenue growth might slow down ‘meaningfully’ this year due to this,” the report said on Saturday. So Facebook has now started selling mid-roll video ads and funding video projects that could host those ads. The company is even paying video publishers to make TV shows for Facebook. ALOS READ: India now has the largest Facebook user base, surpasses the US: Report
It started selling ads inside Instagram Stories and on the same feature on its other platforms like Messenger, WhatsApp and Facebook itself. Facebook was in Cannes to sell and educate ad buyers on Messenger ads just last month, the report added. Last month, its CEO Mark Zuckerberg announced that the platform has two billion users. Currently, WhatsApp has 1.2 billion users.
As far as Instagram is concerned, it has over 700 million monthly active users. Instagram did $2 billion in revenue in 2016 and is expected to grow to $22 billion by 2021. In comparison, Facebook did almost $27 billion in total ad revenue in 2016.