The New Economy of Messaging

Earlier this year, Facebook paid a whopping $19 billion to acquire popular messaging chat service, Whatsapp. Facebook’s last major app acquisition was the purchase of Instagram for $1 billion, in 2012. The enormous difference in valuation and sale price for these two companies underscores that chat messaging has evolved as a core format and platform of communication, now vital to our social and commercial lives. From Imessage to Skype to Google Chat to Whatsapp to Snapchat, chat messaging is now embedded into our global communications ecosystem.

But why would Facebook, with a messenger app of its own, be compelled to pay such an enormous price for another messaging app?

The answer becomes more clear when we consider the other mediums of digital communication that chat eclipses as it grows in use and popularity—namely SMS texts and email. Traffic for chat messaging apps was already double SMS traffic in 2013 and is steadily rising. Email has become over saturated and its efficacy as a medium to reach people declines with each year that passes. Today, no email marketing campaign can garner more than a 30% open rate, with most averaging around 20%. Click rates are even lower, averaging 3%.

It’s probably difficult for many marketers to think about pulling away from email marketing since it has been the backbone of e-commerce for so long. However, marketers genuinely seeking ways to improve and maximise brand engagement and communication will have already recognised the growing irrelevance of email marketing, particularly when thinking about engaging today’s most lucrative and sought after market—millennials.

Facebook paid to acquire a tool that 450 million people around the world use to communicate (many of them, millenials). Thought about from that perspective, the price tag makes more sense. What looms in our future is an evolution of messaging as a tool of marketing and commerce, and that’s what Facebook’s acquisition anticipates.

The relationship between technology and retail has always been driven forward into the future by consumers. Technology evolves the way people interact and communicate with one another and brands that have endeavoured to stay on the cutting edge of those evolutions have always done a better job a reaching consumers where they can be found. And isn’t that the eternal business challenge?

Fortunately, it isn’t rocket science and we know where they are today. They’re on their mobile phones, responding to messages, chats and web and app push notifications. The most forward thinking retailers are already building core marketing strategies around the push messaging functionality of their apps and web and mobile sites. If you want to say goodbye to unopened emails, don’t send them. Reach your customers wherever they are in the format they’re familiar with. The future of engagement with your customers will look exactly like their engagement with everyone else in their lives—an ongoing dialogue.