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WhatsApp Wants to Help Businesses Reach Its Users

Sharing phone numbers and offering ads may irk the security-focused service’s users

August 29, 2016 | Retail & Ecommerce | Mobile

WhatsApp, which was acquired by Facebook in February 2014, finally made an announcement last week that most industry watchers saw as inevitable: It would begin sharing information with Facebook about its users, allowing Facebook to offer “more relevant” ads as well as ads within WhatsApp itself, which until now has been ad-free.

US WhatsApp Users, 2014-2020 (millions and % change)

eMarketer estimates that 12.8 million people in the US used WhatsApp on a monthly basis in 2014, the year it was bought by Facebook. Since then, we estimate, about 5.6 million more people have gotten on board with the free mobile messaging service—many likely taking seriously assurances by WhatsApp that it would not harvest user data for ad targeting, or serve ads at all.

Indeed, such assurances were seen as especially important to WhatsApp users because the service itself foregrounds privacy and security. Messages in WhatsApp are encrypted end-to-end, meaning the company can never see any of the content sent by its users around the globe.

WhatsApp can share phone numbers, however, and Facebook has been trying to get that information from its users—many of whom have been reluctant to share it—for a while.

Information about mobile phone usage may be considered sensitive, though. According to January research by Mindshare, 54% of US mobile phone users were concerned about companies knowing how, when and how often they used their mobile phone—ahead of any other product inquired about. The biggest reason was simple: They cared about their privacy.

And US internet users are less likely to feel good about sharing personal data with social media sites than with just about anyone else. Feedzai and The Harris Poll found in April 2016 that just 1% of respondents trusted social media sites the most with their personal data, tied with “big corporations”—another category Facebook certainly falls under.

Primary Entity that US Internet Users Trust with Their Personal Data, April 2016 (% of respondents)

Privacy and security for services like WhatsApp are global issues, too. And it’s not just the US where users may object. In France, for example, 85.8% of internet users surveyed in September 2015 by Omnicom Media Group and SFR said they found it very intrusive for companies to ask for their phone number—ahead of health status, marital status and other key personal characteristics.

Internet users surveyed in Canada, France, India, the UK and US in February of last year by Aimia and Columbia Business School were also generally down on sharing their mobile phone number—even with companies they planned to purchase from. Just 32% of baby boomers surveyed said they would, and even among millennials, only 42% were game. Most preferred to share their email address. The same survey found that just 40% of respondents of all ages in the US were willing to share their mobile number, vs. 71% who would give their email address.

Even in exchange for discounts, most internet users surveyed by SAS in 15 countries around the world were not willing to share a phone number.

Of course, all of WhatsApp’s millions of users already bucked this trend by sharing their mobile numbers with the app—in exchange for a free text messaging service. That doesn’t necessarily mean they are more likely to say they find such data-sharing acceptable, or comfortable, but it suggests revealed preferences may not always align with survey responses.

After all, while WhatsApp is one of the leading social media platforms in the world, Facebook is even more popular. And that’s still the case after years of changes to its policies, followed by backlashes, followed by hundreds of millions of users around the world deciding maybe they didn’t mind so much after all if they still get to browse their friends’ and family’s updates for free.

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