How messaging apps are changing media distribution

The social media pendulum is in full swing, and latest trends do not necessarily bode well for the likes of Facebook: Internet users — especially young ones — are starting to shirk large, inherently open social media platforms for the sanctity of more “closed” platforms that allow for more private, one-to-one and group messaging.

And that has potentially profound implications for social media distribution: If Internet users continue to shift their sharing activity to messaging apps, then brands and publishers will also have to shift their focuses away from Facebook and Twitter, and find ways to interject themselves into supposedly private conversations. Indeed, Twitter recently made it easier to use its direct-messaging feature, seemingly to combat this trend.

Leading this transition are WhatsApp and Snapchat, two multibillion-dollar businesses built upon allowing hundreds of millions of users send one another text, photo and video messages.

But there are a handful of other messaging apps, all that claim to have large followings. Indeed, messaging apps dominate the rankings in Apple’s App Store and Google Play, the app marketplace for phones that run on Google’s Android mobile operating system. Facebook’s Messenger app, for example, outranked all social media apps, including Facebook itself, in both app stores as of Tuesday evening.

Below are the four leading messaging apps in terms of users, business potential and app-store ranking, according to app analytics company App Annie, and a breakdown of how people, publishers and brands are trying to take advantage of them.

Founded: 2009
Sold: January 2014 to Facebook
Users: 600 million monthly active users as of August, per WhatsApp CEO Jan Koum; 14.8 million unique U.S. users in October, per comScore
App store rankings: No. 4 communications app in Google Play, No. 3 social networking app in App Store
WhatsApp shocked the Internet early this year when Facebook bought it for an astounding $19 billion. The deal was worth $22 billion when it closed in October due to an increase in Facebook’s stock price, which was part of the acquisition compensation. The size of the deal dumbfounded those unfamiliar with the app and was a testament to the growing importance of messaging (especially outside the U.S.) and Facebook’s fear that messaging apps would come at the expense of its audience. The app was able to attract 450 million users at the time of the acquisition, partially by offering them a way to send text messages internationally without incurring expensive telecom fees.

In true Facebook fashion, the app is not focused on selling ads at the moment. Facebook CEO Mark Zuckerberg said he doesn’t plan to start looking into monetizing WhatsApp until the platform reaches 1 billion users. WhatsApp does charge some users $1 a year to use the service, but that generated a measly $10.2 million in revenue in 2013. Publishers For The Win and BuzzFeed have quickly adopted WhatsApp, with the latter even hiring staffers whose sole responsibility is to figure out how to best distribute media through messaging apps and other emerging platforms. That BuzzFeed, a publication built upon upon social media distribution, is preparing for a day when messaging apps are more important that Facebook or Twitter gives credence to their potential.

Facebook Messenger
Founded: Aug. 9, 2011
Users: 500 million monthly users, per Facebook; 62.5 million unique U.S. users in October, per comScore
App store rankings: No. 1 communications app in Google Play, No. 1 social networking app in App Store
Facebook Messenger is the telecom provider of mobile messaging apps; no matter how much you may hate it, you will probably use it anyway. Messaging used to be a core component of Facebook. So popular, in fact, that Facebook spun out messaging into its own app in the summer of 2011. But Messenger failed to attract an audience to rival competing messenger apps until summer 2014 when Facebook started forcing users to download the app if they wanted to read new messages on their smartphones.

Left without recourse, Facebook users downloaded the app in droves — Facebook now boasts 500 million monthly Messenger users — despite many expressing their displeasure with it. As of Nov. 18, the Messenger’s rating in the App Store was an abysmal 1.5 out of 5 stars, with 796 of the 1,006 reviews giving it one star, the lowest rating. The app has since been updated, however, and the rating has improved. True to Zuck’s “scale first, monetize later” philosophy, there are no ads in Messenger currently, although users can buy “stickers” (fancy emojis) if they’re so inclined.

Founded: May 2011
Valuation: $10 billion, according to The Wall Street Journal
Users: More than 100 million monthly active users, two-thirds of whom use the app daily, per The Journal; 21.3 million unique U.S. users in October
App store rankings: No. 3 social app in Google Play, No. 4 photo and video app in App Store
You may know Snapchat as the app you told your teenager he’s not allowed to use, or as the Silicon Valley Company whose brazen founder turned down a multibillion dollar acquisition offer from Facebook. But the ephemeral messaging app that was once notoriously known as a sexting enabler has quickly matured into a multimedia consumption platform worthy of the world’s most renowned brands and media companies.

The app started running ads in October when it served users a trailer for the horror film “Ouija.” It has since started running “native” ads, in which brands sponsor a Snapchat “story,” in which Snapchat curates “snaps,” video or photo messages made by its users, that pertain to a particular event. Samsung sponsored a Snapchat story about the American Music Awards on Nov. 30, Macy’s sponsored a story about its own Thanksgiving parade, and Amazon sponsored a collection of Black Friday “snaps” (presumably to emphasize the horror of shopping in the wild and not on your laptop from the comfort of your home). Numerous other brands have run campaigns on the platform themselves.

The monetization potential is high, which is probably why the app is reportedly worth $10 billion. (Here’s Snapchat’s pitch deck for interested advertisers.) Snapchat does not want to merely be an advertising platform, though; the app is courting media companies BuzzFeed, Spotify, Time, Vice and others to start publishing in the app’s forthcoming Discover section.

Founded: 2009
Valuation: More than $250 million, according to The Journal
Users: 150 million, per Kik; 14.8 million unique U.S. users, per comScore
App store rankings: No. 2 communications app in Google Play, No. 6 social networking app in App Store
Wildly popular among the youngs — 70 percent of its 150 million registered users are between 13 and 25, according to Heather Galt, Kik’s head of marketing — Kik has been called the one messaging platform that poses a viable threat to Snapchat for control of the Gen-Z market. The app has differentiated itself by letting users sign up with usernames instead of phone numbers, thus retaining whatever level of anonymity they desire. The tactic — which offers a respite to users’ so-called “identity fatigue” — has worked; its U.S. audience has increased nearly 50 percent to 14.8 million unique users from October 2013 to October 2014, according to comScore.

Brands and publishers — including Funny or Die, Moviefone and The Weinstein Company — have shown some tepid interest since Kik launched advertising in July, but it’s not quite yet shaping up to be the advertising juggernaut that Snapchat aspires to become.

Best of the rest:

Line was a major reason BuzzFeed wanted to hire staffers to focus specifically on messaging apps. BuzzFeed thought the Japan-based app — which had 3.8 million U.S. uniques in October, according to comScore — was constituting a larger part of its mobile referral traffic, and it wanted to take advantage. Although not as talked about in the U.S., the app has 500 million downloads from across the globe and has healthy revenue stream ($192 million in the quarter ended in late October).

With 438 million users as of August, WeChat is China’s most popular messaging app and a vital component of parent company Tencent Holdings, which earned $925 million in net income in the quarter ended on Nov. 12. The app had just 512,000 unique U.S. users this October, but that hasn’t dissuaded some American advertisers: Agency Laundry Service has started incorporating the app into its clients’ campaigns.

This messaging app may have a modest user base — approximately 300,000 per month — but it’s already struck a partnership with Victoria’s Secret; the lingerie brand started using Frankly’s chat technology in its app last month. That integration may have had something to do with 80 percent of Frankly’s users being 13-to-24-year-old women. But unlike other messaging apps, Frankly’s vision isn’t to be a popular standalone app. Rather the company has a business-to-business focus, hoping brands will license its chat technology for their owns apps and websites.

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