Will WhatsApp be Facebook’s Answer Internationally?

Facebook has a lot of users internationally, a lot. In fact, North America represents just 15% of Facebook users. Asia Pacific, on the other hand, has the lion’s share of users at 28%. Yet according to our recent analysis, North America receives roughly 52% of ad spend while Asia Pacific attracts just 11% of ad dollars. Facebook’s recent financials reported the US and Canada account for 47% of revenue in Q4.

The data not only shows a greenfield opportunity for international advertisers, but also indicates that Facebook has room to grow from an international revenue standpoint.

We all know mobile is hot here, but it’s even hotter internationally. According to Google’s Our Mobile Planet report in 2013, 73.8% of people within the United Arab Emirates own a smartphone. In South Korea, it’s 73%. As much as we love our phones here, the U.S. comes in 13th at 56.4%.

WhatsApp is huge internationally and understandably so. While sending text, voice, photo and video messages via data as opposed to SMS may have limited appeal in the U.S., internationally it’s a big deal. WhatsApp has 450 million active users (Twitter has 271 million) in large part because the app lets users send messages free of those annoying and expensive international messaging fees. All you need is a phone with a data connection, the app, and $1 for the annual subscription fee. That’s it. You can message your friends and family in a neighboring country all you want.

Most Facebook users access the social site via their phones. In the last year Facebook took major steps to monetize its mobile users to the tune of $1 billion in mobile revenue in Q4. Yet, the majority of that revenue comes from the U.S. and Canada, regions that rank about 13th and 14th respectively in smartphone penetration and carry just 15% of Facebook users.

At the heart of Facebook and WhatsApp is the ability to communicate and stay in touch with friends and family. Buying WhatsApp not only gives Facebook a more streamlined approach to that communication, but it just significantly upped Facebook’s mobile presence internationally, particularly in regions with high mobile usage that they’ve otherwise been unable to capitalize on.

While there are no immediate plans, advertisers have to be excited by the potential of the two services fusing, or at the possibility of an ad supported version of WhatsApp in the future.

For more details, download International Facebook Advertising: A Greenfield Opportunity to Engage a Massive Global Audience.