Why Meta Is Investing Big In Business Messaging

Meta is struggling to get its wheels turning on Reels. A leaked internal report recently revealed that Instagram Reels get 10 times less engagement than videos on TikTok.

But Meta has seen more success with business messaging, which Mark Zuckerberg highlighted as a priority during Meta’s Q2 earnings call in July.

Meta estimates that around a billion people per week communicate with a business or service account across WhatsApp, Messenger and Instagram. And roughly 40% of Meta’s advertisers globally (more than 4 million) use click-to-message ads, which redirect people from Facebook or Instagram into one of Meta’s messaging products to chat with a business.

The company told investors last quarter that click-to-message advertising is “a multibillion-dollar business” for Meta with double-digit year-over-year growth.

“It’s one of our fastest-growing ad products,” said Dan Levy, VP of business messaging at Meta. He took on the role in late 2018 after more than six years as VP of small business.

The messaging opportunity is threefold, Levy said. Businesses can use messaging to market to their existing customers, to manage user-initiated service requests or to accomplish a functional task, like resetting a password.

“Our job is to create products that make all of those use cases as easy as possible for everyone,” Levy said.

Levy spoke with AdExchanger.

AdExchanger: Why transition from focusing on ad sales and ad products for small businesses to focusing on messaging?

DAN LEVY: I’m betting my career on business messaging, and the reason why dates back to a trip I made to Southeast Asia in around 2013 to 2014, where I saw firsthand that businesses were using ads to direct people to messaging products, because that was how people wanted to communicate.

One business in Singapore literally had something like 30 smartphones Velcroed to the wall that they used to stay on top of their messages from customers. But that can’t scale.

The promise of messaging is personal interaction that feels similar to how you’d be able to interact with a business in the real world. The challenge is figuring out how to scale that and bring in automation while keeping the personal touch.

How would you describe Meta’s approach to business messaging?

You’ve got to build the right consumer experience first, because businesses will go where the people are.

There’s no question that we’re already living in a messaging-first world, and now businesses are adapting. On our side, click-to-message ads are going well, and we recently launched the cloud API for WhatsApp so businesses can initiate conversations and message users directly, usually for marketing purposes.

But we also recently completed the acquisition of Kustomer, which is a broader investment we’re making in customer service tools that help make business messaging and CRM management easier.

Is the idea here that advertising can be a utility?

Messaging in general is a utility. When I was in Europe this summer, the hotel didn’t even want me calling the front desk. I was able to take care of everything I needed by messaging back and forth with the hotel, whether that was checking in or making a service inquiry.

There’s been an evolution in consumer communication behavior. Communication is about threads.

What do you mean when you say “communication is about threads”?

The way people communicate with businesses is starting to look a lot like how they communicate with their friends and family.

This is more the case outside the US, though. The US has been a bit of a laggard. People in the US don’t always realize what a big deal messaging is everywhere else in the world. We have more than a billion people on our messaging platforms every week.

How many of those interactions are with chatbots, and how do you make sure the experience is good? I’ve tried to resolve issues in the past using a company’s chatbot and I usually end up having to call customer service anyway, which is frustrating.

A lot of questions can be answered simply using automation, like queries about store hours or the status of an order. That’s how a lot of businesses use our products today. You can take care of somewhere between 50% and 70% of queries through an automated system.

But if the conversation is more complicated or more valuable, that’s when you transition to a live human.

Regardless, it’s powerful to have all of these communications in one canonical thread rather than having different systems for email or phone or chat. The service experience should be built around the person, not around the ticket or the type of technology you use to deal with it.

Is WhatsApp or Messenger better for business use cases than, say, Instagram Direct, or vice versa?

Businesses don’t really have to think about that. We optimize messages so that they’re delivered on the messaging service where we think a person is most likely to respond. And businesses have a unified inbox so they can respond to any message in one place as opposed to having to hop between apps.

What are you doing to encourage more messaging-first behavior in the US?

There are entry points on Facebook and Instagram where people can directly message a business through their page. And we have click-to-message ads, of course.

But there are also generational trends we’ve been paying attention to. We’ve surveyed younger people who say that they prefer to message a business rather than calling or emailing them.

And so I think we’re going to see more businesses adapt to this behavior because they have to. Businesses always have to go where the people are.

This interview has been edited and condensed.