Marketing on mobile messaging apps has yet to take root in the US and Europe in a big way, but it is already in full swing in Asia. The operators of Line and WeChat, Asia’s most popular chat apps, are enabling marketers to tap into platforms that provide hundreds of millions of users with a variety of customized services beyond messaging, including hailing taxis, streaming music, ordering food and making payments.
Unlike its Asian counterparts, Facebook Inc. doesn’t make money from its two mobile messaging services, Facebook Messenger and WhatsApp. But both apps are testing models that could potentially generate revenue, such as showing users messages sponsored by advertisers.
Serkan Toto, a Tokyo-based mobile industry consultant, comments,
In terms of monetization, the messenger apps in Asia like WeChat and Line are light years ahead of Western messaging apps.
Advertisements accounted for a third of LINE’s $1.1 billion in revenue last year. The company also earned revenue from mobile games and virtual stickers that people can buy and send to one another in conversations. The platform allows businesses to create official accounts for free, for instance, brands can set up a LINE account to stay in touch with its consumers, allowing them to be updated on promotions, launches and general news about the brand. Some accounts use LINE to directly communicate with consumers.
The company has also recently begun providing optimized advertisements based on user demographics and interests.
WeChat has more than 762 million monthly active users world-wide, mainly in China. Many businesses communicate with consumers and share discount coupons to draw people to their products, for example, luxury fashion brand Chanel used WeChat to interact with fashion show guests in May, sharing videos and snapshots of its new collection on the messaging platform.
Although the two messaging platform giants are pushing the boundaries of mobile marketing and creating new opportunities for brands to elevate consumer experience, both LINE and Wechat are struggling to expand beyond its core user base, serving as a bottleneck to their growth as game-changers. However, as they continue to influence how brands interact with consumers, they remain key mobile players in Asia.
A version of this appeared in The Wall Street Journal on June 22. Read the full article here.