How Instant Messaging Apps Generate Revenue

Instant Messaging Apps

Instant Messaging Apps have changed the way we communicate. The overhead statistics is thrilling for those who dream to become a successful communication service provider. At this moment, the instant correspondences with anyone are utterly dependent on effective real-time communication.

Any form of real-time communication either voice or text-based never fails to bounce your heart with an amicable feeling while communicating with your friends, clients or kinsfolk.

A Pew Research Center study shows that out of the 85% of adults who are online; 67% are using smartphones, 36% use regular instant messaging apps like WhatsApp or Kik, again out of which 17% use ephemeral messaging apps like Snapchat.

Not only general people but also the global business entities are now relying on free Instant Messaging Apps available in the market.

 

Latest Messaging App Statistics 2020

 

  • As per the Statista report, as of 2020, 2.52 billion people use messaging apps on mobile. This number is expected to reach 3 billion in 2022.
  • Statista’s Mobile messaging apps statistics from 2019 reveal that 41 million messages are sent out every minute.
  • The 2019 report of App Annie’s on mobile messaging apps statistics shows that during 2018, global users spent 685 billion hours on Social and Messaging apps.
  • However, Business Insider Messaging Apps Report regarding messaging apps users’ statistics present that these messaging apps now have 20% more active monthly users than social networks.
  • According to Statista’s Mobile messaging apps statistics from 2019, 41 million messages are sent out every minute.
  • WhatsApp and Messenger, both owned by Facebook, are the most popular instant messaging apps in the world. And according to Statista data from 2019, WhatsApp has 1.6 billion users, while Messenger has 1.3. WeChat has the third spot with 1.12 billion users.
  • According to the Wall Street Journal research prediction, by 2020 the average revenue generated per user through messaging apps will be more than $15. WeChat is expected to generate $15.64, while Facebook is estimated to earn around $5 per user.

 

Top 10 Most Popular Instant Messaging Apps in 2020

  • WhatsApp
  • Facebook Messenger
  • WeChat
  • Snapchat
  • Skype
  • Viber
  • Kakao talk
  • Line
  • Telegram
  • IMO

 

WhatsApp

After surpassing Facebook Messenger, WhatsApp became the most downloaded app in the world in 2018. According to App Annie’s 2018 State of Mobile report, WhatsApp crossed Facebook as the most popular and most-downloaded app.

And the reason for this success is that fact that WhatsApp provided a free online messaging alternative to SMS and any other means of instant messaging available. The year in which WhatsApp surpassed Facebook Messenger, it grew by 35% whereas Facebook had 20% growth that year.

Statista’s data on the most popular messaging apps by country reveals to us that WhatsApp has an impressive 73% user penetration rate in Saudi Arabia. Penetration rate as it is referred to be one of the most important metrics in marketing. It refers to a percentage of usage or sales in the total available market. Saudi Arabia has the highest number of WhatsApp users by country followed by Malaysia and Germany.

 

Facebook Messenger

2019 Statista Facebook users’ data showed that this app now has 1.3 billion monthly active users. In the first quarter of 2019, it had over 200 million unique downloads. Messenger is also the second most downloaded app of all time after WhatsApp.

Messaging apps are becoming the new domain for businesses to display their ads. However, there are many ways other than ads for businesses to tap into the messaging market. Therefore, companies are effectively using Facebook Messenger to communicate with their potential or ongoing customers.

According to data that Facebook provided, there are currently 40 million active businesses on Messenger. Further data provided by Facebook this year states that over 20 billion messages are exchanged between individuals and businesses on Messenger every month.

Chatbots are regarded as the future of marketing and customer service. In 2018, an announcement made by Facebook revealed that there were over 300,000 chatbots on their Messenger platform. Messaging apps statistics further show that this is three times more than the previous year when there were only 100,000 bots on Messenger.

 

We Chat

Launched in 2011. WeChat the messaging app has over 100 million users by 2012. It is created by Tencent, the Chinese Tech Company. At present, WeChat has 1.1 billion monthly active users, thereby making it the most popular instant messenger in China.

In China, WeChat is a leader in the instant messaging app’s business. It holds significant market share and around 80% of the top 500 companies in China are registered as WeChat corporate users.

The point that makes WeChat favourable than the rest is the fact that it has numerous integrated “mini-apps” that cover a variety of services. Also, its payment function is a winning point. In 2018, according to the ZDNet report, there were 45 billion messages sent out each day through WeChat.

 

Kakao Talk

KakaoTalk with 49.2 million MAU (Monthly Active Users), is the most popular chat app in South Korea, while Line dominates in Japan, Thailand and Taiwan. Besides, WeChat’s popularity in China is almost unparalleled with 846 million MAU. But with 36% of digital consumers using Messenger and over a third WhatsApp, the control that Facebook has on this booming market can be barely denied.

 

Revenue Growth Statistics of Popular Messaging Apps

The revenue growth rate of these popular messaging apps is unbelievingly fast. Let’s have a look at the last 5 years statistics by Statista which shows the revenue growth of popular messaging apps starting from 2015 and projected to 2020:

This statistic reveals information on the revenue of selected mobile messaging apps in 2015 and forecasted till 2020. According to Statista, the mobile messaging app WhatsApp generated a revenue of 49 million U.S. dollars in 2015 and will grow up to 4.8 billion in 2020.

Eventually, business communication in different organizations relies on free and popular mobile messaging apps. A recent statistics by eWEEK magazine shows that 80 Percent of people use texting for business and 15 Percent said more than half of their text messages are sent or received for business purposes. Right now, popular brands and small businesses within the globe both prefer to communicate their clients and customers through messaging apps!

Hence, many of the new entrepreneurs or communication service provider will be curious to know the background success stories of these Apps. These apps add extra sugar in our life because most of the existing messaging apps are free, cross-platform and proprietary instant messaging application for real-time communications on multiple electronic devices such as smartphones, tablet computers and personal computers. Before the discussion, we can guess your next question!

 

How app owners make revenue from their Instant Messaging Apps?

This question is obvious for those who want to start a business or already own an Instant Messaging App. Either a newcomer or owner of a messaging app, both needs to put more emphasis on making revenues.

To generate that extra amount of revenue from your app there are few helpful things. While the user makes calls or sends SMS, the balance will be deducted from the GSM account or the app account.

In addition to this if there is virtual roaming it will further add to the revenue as well. According to Grand View Research, Inc., “the global roaming tariff market size is expected to reach USD 100,750.0 million by 2025, registering a CAGR of 5.5%.”

Apart from this, enabling Operators to access competitors’ customer base by engaging them with your OTT apps and then sending them different promotional content is an additional bonus in terms of revenue generation. So, here are the few guidelines with the references of successful stories to tip you on the smart ways of monetizing your instant messaging app.

 

Top 4 Ways to earn from your App

 

Subscription fees or Download charge

You can develop two versions of your instant messaging apps. One will be free of charge to download and subscribe to another one with subscription fees which will provide your users with a complete experience.

This premium version can work as a teaser because after using the free version of your app, your customers will realize that the app can serve an important role in their lives which they don’t want to miss. If they enjoy what your free app offers and want a better experience, they might be willing to pay for the premium version.

If we consider this case that your app has 1 billion users, everyone is paying about 1 USD for renewal would generate about billion dollars in revenue per year. According to a recent report on app monetization survey says that 5% of Apps are using In-App Subscriptions.

 

In-App Purchasing

According to a recent study, 65% of mobile apps use advertising to generate revenue, compared to 50% using in-app purchases. If we consider Line, which is a popular messaging app in Japan, Taiwan and Thailand, it generates revenue from two prime areas.

  • First from those are free-to-play video games that make money from in-game purchases of virtual items and other services.
  • The second one is buying “stickers” featuring different emoticons, real-life cartoon characters that users use to inbox their friends.

Besides, WeChat can help you hail a taxi, book a dinner reservation, transfer payments, and more. Using Skype, WhatsApp you can avail calling credit as well.

The In-App purchases can also include a variety of other features, such as Personal DID Number for the end-user, Mobile TOP UP, Money Transfer. Value-Added Services (VAS) can also help to generate more revenue from your OTT Application.

Here instead of Sending VAS content in SMS, an operator can send it through IM message to the end-user. This, therefore, helps to save SMS cost and also generate profit from VAS Services. And as IM supports rich content so it is possible to send a variety of content.

messaging-apps-pai-chart

This pie-chart shows the information on how mobile apps generate revenue. According to Sweetpricing, research shows that 32.5 % of mobile apps are making revenue both from In-App Purchasing (IAP) and In-App Advertising.

 

In-App advertising or Personalised Ad Targeting

In your instant messaging apps, you can add In-App advertisement through digital marketing. But how? Well, your users always log in your messaging app using their Email account/Phone numbers/ Facebook account.

When these people log-in, data are entered in your app, the analytics server can easily track your customer’s behaviour, likes, and tastes. Based on their interest, likes and dislikes, you can show ads to them whenever they are using your messaging app.

Personalized Ad targeting through the segmented user base helps to reach the target audience with more precision and in turn, helps to generate revenue for the app. According to McKinsey’s study, companies using “data-driven personalization as the core factor for marketing and sales decisions can improve marketing ROI by 15% to 20%”.

This step increases the chances of making revenue, as you are only showing the things your customer wishes to see. However, you should be careful that this process does not hamper your user’s experience. LINE Messenger and WeChat are the few OTT communications players to demonstrate revenue from In-App advertising.

 

Business communication solution through FREE Messaging App

If you provide an enterprise communication app solution, you can sell your app to the companies who prefer their own branded app for communicating securely. For instance, WeChat, the popular Chinese messaging app also provides Instant Messaging App solution with white labelling facility for business communication names as Yammer.

 

To summarize, Free Messaging Apps or Instant Messaging Apps are the main targets of any communication in recent days because of the highest level of convenience and cost-effective features. So, this business is emerging for entrepreneurs, communication services providers, and VoIP service providers who know about developing mobile messaging apps with multiple features. So, this article is targeted to those communication service providers and entrepreneurs as they will get to know the top points to make money out of their free messaging apps solution.

 

messaging-apps-cta

 

Note: This Blog has been updated on 14th April 2019 with the latest information.

The Author

Abhishek Upadhyay

Abhishek is a graduate in Electronics and Instrumentation currently working with REVE Systems. A digital marketing professional, Abhishek also likes to write on several tech topics not limited to telecommunication.
Abhishek Upadhyay

  • Bushra Siddiq Rahman

    brilliantly written. very informative. 🙂

    • REVE Systems

      Thanks you!

  • S M Mahmudul Hyder

    Nice piece of writing, very informative! Good to know about the secret 😛

    • REVE Systems

      Thanks you!

  • Sabbir Hossain

    Nice writing… keep it up (y)

    • Shamim Hussain

      Thanks you!

  • sayma jahan

    Very informative and nice work. Keep it up.

  • Waizun Mustahin

    Good write-up! I never knew WeChats monopoly in China was so remarkable!

  • Hussam Taha

    It’s a very interesting topic to read about .. facts and numbers always give a huge support.

    I really appreciate the effort made to do such article.

  • Mayank Agarwal

    Nice and informative read….the article provides a real good insight about the revenue generation of instant messaging apps..

  • Abdul Hamid A Wahba

    Whats app doesn’t have any advertisement, or they offer any thing to be purchase, how they make revenues..

  • Sheg Oak

    Misinformation – Whatsapps did not make any income as of yet. There is no way they would have made any Millions of dollars you erroneously pointed out. Facebook makes money not WhatsApp.
    If its easy as said, why not launch your own home based chat app in Banglagesh to see? Bangledesh do not have a known dominated app (local) as in kakao and LINE..so ?

  • Moh’d Hossain

    Informative and good

  • Tyler Rapp

    Interesting topic. Social technology and social advertising helps businesses to boost and market their products and businesses and generate a great revenue and income as well. Great article! Check out https://dollardigits.com/ mobile app!