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Ads in Messenger could be Facebook's next big thing

Matt Kapko | Feb. 22, 2016
Facebook is reportedly readying a new user-initiated advertising medium within its popular Messenger app that could reshape the ad industry.

"Facebook would likely be very hesitant to include ads directly in person-to-person messages on Messenger but including ads on consumer-to-business communications could very well be a possibility — especially if the consumer has already initiated contact with the business on Messenger," he says.

When Facebook first introduced ads on its platform in 2004, the site had fewer than one million users. The company's user base today is 1.59 billion MAUs, and its ad business drove $5.6 billion in revenue during the fourth quarter of 2015.

Advertising on Messenger could also drive meaningful ad growth for Facebook, considering the company's proven ability to reach consumers at scale with targeted advertising, according to Shafer. If Messenger ads prove to help businesses increase sales with existing customers, brands would flock to the platform, thereby creating a scarcity of inventory and higher prices, he says. 

Whiteman also sees the potential for increased ad costs "because of the intimate relationship the ads create between brands and single consumers." The level of execution will largely depend on advertisers' ability to be creative with the medium, but if they are, Messenger ads "just may become the app's main money maker," she says.

 

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