Market Context
A year on, what did marketers learn from the WhatsApp privacy debacle?
It's easy to knock anything to do with Facebook, sorry Meta. A year ago, WhatsApp pushed out a new terms of service with the brute force message to its base to agree to it or lose access. Nice. But what actually happened? In my latest article I look at the data, consider the effect of positioning and ubiquity in the market and ask "was this really the end of WhatsApp as we knew it?"
On 7th January 2021, Facebook-owned WhatsApp announced a change in its privacy policy and terms of service to its two billion users^. The declaration generated a backlash so strong, WhatsApp decided to delay the implementation of the changes by months.

In the normal course of things, a new privacy policy would have largely gone unnoticed. If you don't believe me, in a previous post I discussed how a study found that 98% of people would sign up to a bogus website^^ and agree to pay with their firstborn, without realising what they just agreed to.

So what caused everyone to suddenly sit up and take notice of WhatsApp's changes? In this article, I discuss the cause of the WhatsApp debacle, what will the impact was for the company and crucially, what can product marketers learn from it.

Will WhatsApp haemorrhage a significant part of its 2B users?
Perception Is Reality.

For years, WhatsApp has been enjoying unassailable growth in the messaging category. This is despite them not being that strong in traditional 'must have' markets like the US.

Yet at the turn of 2021, an unannounced pop-up message in its app declared there would be new terms of service and privacy policy coming. Users had no choice to accept them or lose access.

The issue its users had is that they believed that Facebook (now Meta) was going to have access to even more of their data just to maintain access to WhatsApp. As you might expect, the consumer response was easily summed up in colourful words I can't print here.

You can hardly blame people either when Facebook in its pre-Meta handle has form in this department, having gone from internet darling to internet menace in the space of just a few years. Given the sentiment about privacy online and Facebook in particular, you can at least start to rationalise people's responses.
The most popular messaging app in January 2021. Signal does not even factor.
WhatsApp Forgot The First Rule Of Marketing.

Despite the noise, WhatsApp wasn't actually announcing anything really new here. Facebook (Meta) companies already have access to your data, because you gave them permission in the last Terms of Service you agreed to.

What is 'new' is that they are trying to be transparent, by telling you who has access to your data and how it will be used.

Reading the comments online and the hyperbole of emotion leads you to understand that most people have not read or understood the new notices. Instead, they've seemingly echoed the outpouring of outrage and fallen into the perceived narrative that any Facebook (Meta) company is evil by default.

I have read the policy. I can confirm that 'Mark Zuckerberg eating your firstborn for breakfast' is not part of the new policy. Herein lies part of the problem - according to research from Deloitte, 91% of users don't actually ready the T&C's or policies.^^^

It seems WhatsApp forgot the first rule of marketing: You are not the customer. Subsequently, it shifted towards internal thinking over customer orientation. In a way, you can understand why WhatsApp would think no one would read it. But they were wrong.

If WhatsApp had been closer to consumer sentiment, they would have known that this updated policy required more careful handling. This should not have been business as usual for WhatsApp.

User Migration Isn't A Threat When You're King.

Whenever you're dissatisfied with a product or service, you look for an alternative, right? WhatsApp users did just that in their droves following the backlash around privacy. Over the first three weeks of January, WhatsApp's rival Signal gained 7.5 million users globally, and Telegram gained 25 million.^^^^

In both cases, the increase appears to have come at WhatsApp's expense. Data tracked by the analytics firm App Annie, shows WhatsApp falling from the eighth most downloaded app in the UK at the beginning of the month to the 23rd by 12 January. By contrast, Signal wasn't even in the top 1,000 apps in the UK on the 6th of January. Yet, by the 9th of January Signal was the most downloaded app in the country.

But here's the rub. These numbers, in the correct context, are near meaningless. WhatsApp has two billion active users, Telegram 500m before all this and Signal - darlings of Elon Musk - do not even register as competing with the big boys.

Telegrams recent global growth of 25m is impressive in the time frame but it's only a 5% increase of their base. Telegram still remains four times smaller than WhatsApp. There are 7.9 billion people on the planet according to data from the United Nations.^^^^^

A quarter of the entire planet are active WhatsApp users.
Talking Into A Paper Cup.

There's a slight problem with migrating to a lesser known messaging app, in that when you get to your destination, whether it be Telegram or the most private of all, Signal, hardly anyone you know is there.

When I got to Signal and Telegram, only 1% of my address book was using these services and 'recent activity' from my contacts was 2-4 weeks ago. Hardly messaging that's 'instant'.

I am not an impatient man. But I usually like a response quicker than next month. I could post a handwritten letter to them, go on a two-week holiday and get a reply before I got a response from a friend on a substitute app.
Everyone Is On WhatsApp.

This is where the rubber hits the road, because practically everyone is on WhatApp. It's very difficult to have a conversion with any of your contacts if that small but important point is overlooked. As my experiments with other messaging apps have shown.

In fact, WhatsApp is so big, it's not a messaging app anymore, it's a social network! And the third most popular social network worldwide! Everyone you know uses it. Your school and friend groups are all there. It works on every operating system known to humans. And that's why, even if you are one of the reported millions who signed up for a competing service, you will find it hard to completely leave WhatsApp behind.
The competitive spike was short lived, despite a prophecy of gloom for WhatsApp.
The End Is Not Nigh.

Marketers LOVE to predict the end of things. It's the end of TV as a medium, the end of print and some were quick off the market to predict the end of WhatsApp as we knew it.

It's almost possible to consider why when looking at a data for February 2021. Key competitors, Signal and Telegram both enjoyed a significant install and daily active user (DAU) bump. The former also benefiting from a call to action tweet from Elon Musk.

But what people fail to see is the world beyond the end of their noses and this was not the end. In fact, WhatsApp's DAU growth, albeit slow, continued unabated in the same month. What we see here is people trying something new in addition to keeping WA. The principled platform shift met cold hard reality just 8 weeks later when the aforementioned competition started shedding users quicker than Usain Bolt can run the 100m.

WhatsApp's PR woes are grounded in not being consumer-oriented. They had a misstep because they thought that the consumer response would be the same as always, i.e., no response. Their message was not clear about what was really changing. Critically, they failed to reassure their base that its privacy and data was safe and secure. At least not in a way that was easy enough to understand.

As a result, the main thrust of the change, how third-party business handles your data was largely ignored as a talking point.

WhatsApp used the extra time it's given it's users to show its value in a more frictionless way as it needs to gain the trust back of its users.

When you have a ratio of 8:1 PR and Communications employees to each tech journalist it's not that hard to get your message out at scale. *

It just has to be the right message.

Ultimately, WhatsApp's formidable market position saw it pull through shooting itself in the foot. Two billion active users, with significant growth potential in markets like the USA and an army of PR people back at HQ are non-trivial facts.

When it comes to monthly active users of any app Globally, Facebook (Meta) companies occupy all four of the top four most active with WhatsApp sitting at number 2 in the charts.

The doom-mongers failed to consider the market position of WA in the equation. Strength in their base users is only half the story, you have to contrast that position in context of the competition. In this article, I think I've laid out that the competition was not a significant threat to WhatsApp, despite stealing some of the limelight, the effect was short-lived.

In the end, there was only ever going to be one winner emerging from WhatsApps's PR nightmare. WhatsApp.

Stay Safe. Look after one another.



^ Statista/Company Announcements.

^^ Jonathan Obar at York University in Toronto and Anne Oeldorf-Hirsch at the University of Connecticut.

^^^ 2017 Deloitte survey of 2,000 consumers in the U.S.

^^^^ UK parliament home affairs committee.

^^^^^ World Population Prospects: The 2019 Revision - United Nations Population Division.

* February 2021. Section4 analysis of LinkedIn data, news outlets include: NYT, WSJ, CNN, FOX, Reuters, BBC, Bloomberg, Business Insider, CNBC, MSNBC, The Economist, The guardian, The Financial Times, NBC.

© Harvey Lee 2022. All Rights Reserved.
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