Brief:

• Facebook confirmed that it will start putting advertising inserts in WhatsApp, the messaging app that previously had resisted ad sales. The social media giant announced the change at the annual Facebook Marketing Summit in the Netherlands, 9to5Google first reported.
• Beginning next year, the ads will appear in the WhatsApp Status section, which is like the Stories features of other apps that let users post text, photos, videos and animated GIFs that disappear after 24 hours.
• The WhatsApp product catalog will be integrated with Facebook Business Manager to give advertisers the ability to place ads in WhatsApp, according to posts by attendees of the summit.

Insight:

By adding ad inserts to WhatsApp, Facebook is giving brands a chance to reach the more than 1.5 billion users of the messaging app worldwide. The addition of ads is a significant change for WhatsApp, whose founders had long resisted the idea of cluttering the app with ads.

Facebook bought WhatsApp in 2014 for $22 billion and gave WhatsApp freedom to operate independently. But as Facebook management sought to monetize WhatsApp with ads, tensions grew with founders Jan Koum and Brian Acton. They both left the company in the past two years, while Facebook has worked to integrate its main social network with WhatsApp, Messenger and Instagram, another significant acquisition.

The biggest risk with adding ads to WhatsApp could be alienating users who are accustomed to an ad-free experience. However, as the company has seen with ads on Facebook and Instagram, it should be able to walk the line as long as the ads aren't too intrusive and don't prolong download times, especially in emerging markets that have spotty cellular service.

Facebook overall has placed more emphasis on Stories Ads among its apps as users gravitate toward the temporary sharing of images with their friends and followers. About half a billion people look at Stories on Facebook, Instagram or WhatsApp every day, CEO Mark Zuckerberg said last month during a quarterly earnings call. After pushing Stories Ads last year to reignite ad growth, the format grew to 3 million advertisers on Facebook, Instagram and Messenger in Q1 from 2 million in the prior quarter.

WhatsApp could follow the example of Instagram, which has increased ad opportunities for mobile marketers. Instagram in March added polling stickers to Stories ads, giving brands and retailers another way to engage the image-sharing app's users with interactive content. Nine out of 10 campaigns that used poll stickers in a pilot program boosted the number of three-second ad views, the company said.