Meta Conversations, What This Means for Augmented Reality

August 1, 2022 | Tune in here.

Meta just released their Q2 earnings report and announced a 1% decline in revenue for the first time ever. That 1% amounts to $28.8 billion and they predict that it will grow further in Q3. They further announced that they lost $2.8 billion on the metaverse or more formally known as Reality Labs.

Did they make too high of a leap or do they have a revenue masterplan?

Meta hosted its inaugural Conversations event a little while ago and seems to be optimistic in generating revenue from its messaging platforms. 

I’ve actually been chatting with a lot of businesses lately. Priceline, Wayfair and United to name a few. And, honestly… It is always so damn annoying. All these AI bots assume that you are not able to access such basic information and that you would go out of your way to talk to companies for elementary details. The only time I would make the effort to talk to support is if that company did me wrong. Nine out of 10 times, AI cannot help and you need to ask for a human. They will connect you with a human but that conversation can also be an endeavor.

My complaints about this will go nowhere since this is the new trend in customer support and there’s really only one player that holds the keys to all the messaging apps that matter. Of course, that’s Meta. They have Messenger and WhatsApp and Instagram’s messenger connects to the Messenger app. Side note, I’m actually going through some sort of Facebook login authentication debacle and learned that Instagram can stand on its own, including its messenger.

I’m trying to remember how the transition from Yahoo Messenger happened. I think Facebook launched Facebook Chat in 2008, 10 years after Yahoo Messenger launched. And I guess people were just on Facebook all day long. I remember a time when my first Chrome tab would always be Facebook. And I also remember thinking that it’s been a while since I logged into Yahoo Messenger. It was a totally different app that needed to be downloaded and frequently updated. I logged in for the last time to just look at the latest release and noticed how none of my friends were online. End of Yahoo Messenger for me.

Today I speak to less friends regularly and have more messaging apps than ever on my phone. The ones that matter though are Messenger and WhatsApp. 

Messenger was really the natural progression for Facebook. They’ve connected people who haven’t seen or talked to each other in such a long time. We used to need to send email-like messages to be able to connect with them. Facebook Chat made it possible to connect in real-time across carriers and geos. 

It was quickly able to connect more than just old acquaintances and kids in college. A mere three years after launch, then parent Facebook wanted to let it break free as a standalone app. Thus, it purchased Beluga. Surprise, surprise for an undisclosed amount.

The vision behind Beluga was a standalone messaging app, something that Facebook needed to bifurcate its chat functionality from the rest of its site. And so shortly after the acquisition, Messenger became a standalone app in 2014.

As Facebook was creating its own messenger app, Tencent launched WeChat in China. And comparing Messenger vs WeChat today, there’s just far more in the latter than what Facebook has between two apps. It’s like 60% of the apps on my phone can be replaced with WeChat if I were living in China. There’s audio, video, voice, of course then there’s also maps, banking and finance, gaming, online commerce and a whole lot more. I am glad though that our data in the non-China market is not handled by one private-sector entity. Being locked out of Facebook really made me feel like I was cut off by the world.

What WeChat is today is clearly the vision for what Messenger wants to become. I would argue WhatsApp too. I wouldn’t be surprised if they merged those two apps in the future since it’s really serving the same purpose but to different audiences. But among my group of friends, I can almost predict that Messenger will be the surviving app. I tend to keep in touch in groups on WhatsApp but when I need to talk directly to one person, I’d use Messenger.

So how we get to a complete ecosystem of connectivity in messages, payments, events and more begins with the purchase experience. 

The best way I can describe this is when you walk into a store without knowing what you are looking for exactly but you describe this to a sales associate and they drag you halfway around the store to show you what you might be looking for. This is what messaging can do. 

There isn’t a digital experience for this just yet other than the search bar. But if you search on Walmart, it can show you some pretty hilarious things. I can’t quite remember but on another lesser known site, I was looking for a bamboo napkin holder and it decided that the next best thing would be bamboo chopsticks.

The idea behind messaging is that you can communicate with people from businesses who can show you what you are likely looking for and help you with the check out process.

Now, as a digital marketer, we need to figure out where to position this in our strategy. There’s two types of campaigns that would allow you to reach users on a Meta messaging app - Messages Objective and Sponsored Messages.

The former is more of the campaign that has full funnel capabilities. On its site, Meta says that the campaign can generate leads, increase transactions, reach and connect with people, answer questions and offer support. So there’s really a plethora of use cases where you can point this campaign type. We’ll revisit this in a little bit.

Sponsored Messages are more of what I was looking for when Meta started talking about messaging campaigns. It’s a retention campaign (and since various agencies and advertisers can define that differently, we’ll use a loose definition) that allows you to reach users who have previously reached you. I think this is brilliant - you’re able to periodically remind customers of sales, prepare them for retail sales or if you are a lead gen advertiser you can continue to nurture anyone who has interacted with you already. When thinking about the funnel, by design this supports lower funnel customers for ecommerce brands and consideration for lead gen or high consideration, long conversion cycle brands.

Back to campaigns using Messages objective, what I’m trying to figure out is the need for this campaign. And I do not think it doesn’t exist but I do not think it is simple.

Let’s tackle prospecting, defined as customer acquisition. 

If I wanted to reach users and get them to purchase a product, when would I decide to use carousel ads or messages ads? Before I move forward, small rant. I just hate the answer ‘test and learn’. We cannot be blindly testing things. Tests need hypotheses but, more importantly, experimentation is a much better route to learning anything. Ok done. My concern is that I wouldn’t want to cannibalize the experience of a carousel or conversion ad that has a much shorter route to the brand’s site and therefore checkout process. So how do I select audiences to use for messaging?

I don’t think moving up the funnel is the answer. Reaching less qualified users and interacting with them, trying to get them to purchase just seems like cold calling and I just hang up on those people, no offense. I think a better way of positioning these campaigns is to re-engage people who have abandoned their purchase journey and some other condition such as not returned to the site or frequently returns to the site but has not made a purchase. Individual brand data will determine which one is more appropriate to reach your goals. I just don’t think there will be a blanket shift in the way that users will want to purchase online, especially if we’re talking to bots most of the time.

Ok, remarketing defined as customer engagement including retention. I guess those are actually two different strategies.

Engagement is pre-acquisition but I’m also going to say this is pre-engagement with the brand. This is where it gets interesting. I think the answer is different for various types of advertisers. Broadly, lead gen clients could use the Messages objective if their service is a high consideration one. You want to start communicating with people who are in consideration of your service offering but have not yet interacted with your brand. 

Conversely, for an online retailer, you generally want to minimize the the friction from click to sale. So most advertisers would probably not need to use this type of campaign objective to nurture users. Where it does come into play is for higher price point products and very customizable options. If you wanted to get a watch or some sort of jewelry, then showing prospective customers that they can complete their journey online would be a good use of a Messages objective.

Remarketing seems to be a clearer strategy. For actively engaged non-converters, it’s pretty intuitive that leaning into messaging could help sway some of these users. Even for retailers who are selling lower price point items, just giving customers the personal touch could go a long way. However, simply testing this objective into that segment will result in cannibalization. Right now, pointing carousel or simple static remarketing ads to these users will get a chunk of them to convert.

As we earlier discussed, we need to find the right place for this objective in your media plan for it to be additive. So what we should be really thinking about is what is the size of the remarketing list that is not converting no matter what we do.

You can play around with lookback windows or get sophisticated with a CDP to isolate these audiences of people who have just abandoned their journey with you. And, testing messaging to the whole segment is a worthwhile test on its own but adding a qualifier would help enrich early results. These could be simple too such as post engagers but non-purchasers in the last 90 days.

If you really think about the monetization of Messenger and Whatsapp, you’d likely think ‘Why is it taking so long?’. Meta purchased these apps over ten years ago now and it only held its first Conversations conference this year. 

There’s of course the whole debacle with the Whatsapp founders over ads on the platform but they’ve since exited the company.

While Messaging still continues to thrive, in the space of connectivity with businesses, it does seem like AR or augmented reality has a chance at filling this need. Snapchat is filled with make up filters that help move cosmetic products and it doesn’t end there. Furniture, travel and many industries are finding ways to use these interactive tools to give people a better sense if they will like something or not.

Neither of these are gaining as fast traction as you’d imagine, or rather as their creators had imagined. There’s just not a lot of ad dollars pointed at customer interaction. In the case of messaging, it’s industry that needs to be open to a new product. This can be harder but there is more investment behind it between Meta and first-mover advertisers who adopt. Messaging is already an activity that people do and so the transition to business is really only a matter of time.

AR, on the other hand, needs to come from consumers. Until we can move from a novelty experience to a practical second nature, AR isn’t going to take off. This doesn’t at all mean that it doesn’t have the ability to become mainstream. It just means that consumers will dictate whether or not they like the experience and, if so, when it will be another form of interaction. 

That’s my take. I think we will make a quick progression from messaging to AR. I think messaging will eventually evolve to incorporate AR. When that does happen, we accelerate our use of another means of expression.