Reaction as Facebook acquires WhatsApp: DigitasLBi, MediaCom, RadiumOne, Sir Martin Sorrell, Adaptive Lab, Bloom Worldwide, Arena, Forrester, Jam, Bite

The Drum gauged the reaction of those within the marketing industry following the announcement.

Dan Calladine, head of media futures, Carat

WhatsApp is comparatively unusual as a four-year-old company in that it actually makes revenues. Each user gets the service for free for a year, and then pays $0.99c for the following year. Facebook on the other hand makes approximately $0.60c per mobile user per quarter in ad revenue, according to estimates based on their ad revenue and users. But the potential in WhatsApp is to make much more through things like payments. I think that it’s unlikely that WhatsApp will shift to an advertising model because it’s something that the founders have always rejected, but it could still drive brilliant business value for Facebook because it opens up new ways to monetise, as the Asian mobile-based social networks and messengers like WeChat have shown by redefining how they use payments, games, stickers, virtual goods and so on. Another benefit for Facebook will be that it can expand its user base, and get access to data on usage. It’s also worth pointing out that even with no advertising, brands can use WhatsApp. Vodafone India did a brilliant campaign last year for the IPL using WhatsApp to promote its SuperFan push.

Justin Pearse,head of marketing, Bite

One of the most common worries expressed about Facebook is that its growth is slowing, with younger people in particular. This purchase, its biggest so far, shows Facebook is determined to keep a hold on this lucrative market. It's a clever move to expand its ecosystem deeper into mobile, where people are increasingly living their digital lives. Although both companies have denied plans to launch advertising on the WhatsApp service, Facebook lives and dies by the data it can collect on people's behaviour and being able to integrate WhatsApp user data will make Facebook's offering to advertisers even more compelling.

Dan Beasley, head of mobile, Jam

At first glance, $16bn (or whatever it actually ends up being) is a huge sum of money, however when you think that WhatsApp is almost certainly carrying more SMS messages than the entire SMS volume of the world combined it doesn't seem so stupid. The question on most people's lips is 'how will FB recoup their investment?' The answer is they may not in the long term. But what this move does do is ensure that Facebook remains relevant in both the established markets and gives them a strong foothold in emerging markets where bundled SMS is not as prevalent as, say, the UK or Europe. Will brands come to the platform? Yes, they would love too, I'm sure. Will Facebook/WhatsApp let them? Not now. There's too much risk with users already declaring on Twitter 'that's me and WhatsApp done now Facebook own them', and long term if Facebook wants to monetise it then they'll have to work hard to create formats that work inside what is a very different social mobile environment than the more traditional Facebook mobile experience. What we do know is that today is the first day that that almost 100 per cent of global smartphones will have a Facebook-owned app on their home screen.

Ariel King, content strategist, Arena

WhastApp purchase, much like the Yahoo! Tumblr purchase, will be a scary one for existing users and their perceived user experience should advertising get involved. Should brands be allowed to advertise via WhatsApp there will be numerous questions: What level of data will be shared? How contextual will targeting become? How intrusive will advertising be to what is effectively a private messaging service? And until these questions are answered, brands will be cautious. That's not to say that brands haven't already run campaigns via WhatsApp - Absolut being an example - but this has been more about community building and engagement rather than traditional advertising.

Nate Elliott, analyst, Forrester

Facebook works harder than any other social site to keep people coming back. In the past year it has focused much of that effort on mobile, introducing Home and Paper, and upgrading both their Facebook and Messenger apps. The WhatsApp acquisition is another step towards keeping people engaged no matter where they are.It'll be tempting to read this as a sign Facebook is scared of losing teens. And yes, the company does have to work hard to keep young users engaged. But the reality is, Facebook always works hard to keep all its users engaged, no matter their age. Facebook is tireless in its efforts to keep users coming back. That's why their 1.2 billion monthly users keep visiting the site more and more frequently, rather than drifting away.

Adam Russell, head of display, DigitasLBi

Facebook’s acquisition of WhatsApp, like that of Instagram, is a defensive strategy against a successful competitive platform. Facebook is unlikely to change the model in the short term – it’s too popular. Facebook focused on growth first and revenue second, and it is likely to do the same with WhatsApp. A commercial focus will come though, even if it is only in tightening the integration with the broader Facebook platform. The purchase prices Whatsapp’s users at $35 each, and with the current subscription model of $1 a year the breakeven point would take 35 years. Expect some sort of ad model, just don’t expect it yet.

Chris Binns, managing partner and head of strategy, MediaCom London

WhatsApp is the instant messaging service that is in the process of destroying MMS & SMS businesses for the mobile companies. There are 450 million users worldwide and 500 million images shared daily, while there are only 350 million shared on Facebook and 55 million on Instsgram. The business model is based on no ads and no games – with users getting the first year free and then paying $1 a year thereafter. Given it only has 32 engineers and less customer service people, this is a smart low cost, high volume business. The investment looks toppy as a proportion of Facebook market cap (YouTube cost Google 1.3 per cent of market cap, this is nine per cent of Facebook cap), but that doesn't make it a bad move. It's a hefty bet is all. WhatsApp is freeing up people to share and connect on a cost basis 100 times lower than the data impact of using SMS & MMS; many people (from Cisco to Microsoft and beyond) have predicted the rise of the visual web – this is part of Facebook's ongoing bet that this is nearer than we think and that sharing and connection will move beyond words. Arguably, both these acquisitions are "recruitment" bets as well. Instagram and WhatsApp's core user base is younger than Facebook's is now. Zuck doesn't need to recruit these guys into Facebook, but does need them in part of the Facebook family. So, the acquisition is totally in line with Facebook's long term business vision, even if it won't be an advertising vehicle.

Laura Dinneen, director of strategy, Bloom Worldwide

Facebook has tried and failed to own mobile messaging in the past and while Facebook Messenger is used fairly widely, it has nothing on WhatsApp in terms of usage, especially across European markets. This acquisition puts Facebook back in the game in terms of mobile messaging, and reignites itself with the youth market, but where does this fit with the wider Facebook beast? They are on a mission to become a media company so we'll see tonnes more content and advertising options. But to maintain usability they need to provide utility, so we will see more app acquisitions and launches for Facebook over the next year or so.

Ron Schott, head of Spring Creek

When Facebook wasn't able to persuade Snapchat to become part of the team in Menlo Park, people started to worry the company would miss out on the private messaging mobile trend. That's in the past now. Facebook's acquisition of WhatsApp firmly cements them in the mobile space - even more so than the fact most of their revenues came from mobile. It's the logical step for a company that, rather than perpetuating the idea of a "Facebook phone" that makes the headlines every quarter or so, is pushing for the lion's share of activity on the most-used devices in the world. The smart thing is, they're not doing it by developing their own phone, or even by adding every feature into Facebook - they're doing it with purpose-built apps and smart acquisitions.For brands, the possible connections between Facebook data and WhatsApp identities means the chance to engage users in a different, but still targeted way. I wouldn’t count on that being in a Facebook-style ad way, though – WhatsApp have been very outspoken in their pledge to make the experience an enjoyable one for their users – only just recently starting the yearly subscription model (at an incredibly low price). Facebook’s own standalone Messenger app actually saw a 70 per cent increase in use in the last quarter, making for interesting mechanics between the two apps now. Keeping that in mind, this really looks like a data/user play from Facebook – one that we’ll have to watch in order to see how it plays out.

James Haycock, CEO, Adaptive Lab

One of the most amazing things about the WhatsApp story is the sheer size:scale ratio. In less than five years and with just 30 or so developers they've amassed over 430m users, a similar number to Vodafone. Instagram had 8 employees when it sold, imgur.com (which has more monthly impressions than NYT and the Weather Channel combined) has 11.Now, with the benefit of Facebook’s scale, capital and experience to lean on, I'm sure that WhatsApp will race towards 1 billion users within the year and we’ll see WhatsApp messages surpass SMS as a comms medium. Even with useful integration with FB messenger a potential, expect WhatsApp to remain laser-focused on its brilliantly simple, clean offer. This deal is a standout success story of a company that’s rewritten the rule book on how to run and operate a business with huge reach and scale. My advice to CEOs of companies threatened by any of these businesses is be scared, be aware and do whatever you can to learn from them.

Rupert Staines, MD Europe at RadiumOne

Facebook’s purchase of WhatsApp for $19bn may seem hugely inflated, but when you consider it has a 70 percent active user rate within a very young demographic plus access to the burgeoning emerging markets, then you start to identify why Zuckerberg has signed on the dotted line. This agreement sees WhatsApp become Facebook’s first paid for product and with high engagement rates, it will be interesting to see how this platform becomes further monetised. However, it fits perfectly to Zuckerberg's vision for connecting everyone everywhere. The simplicity of WhatsApp means advertising is an unlikely route to generate revenue which means Zuckerberg will probably look to other paid for services, such as a mobile wallet, as the cash cow. Facebook will now look to strengthen its grip on advertising in the mobile space by connecting WhatsApp to your Facebook profile. Ultimately, creating a one stop shop for your digital self might be Zuckerberg’s goal but whether advertisers and consumers' preferences elect to unite and follow him is quite another. The acquisition of WhatsApp does not drive huge commercial value in the short term, but it does put a stake in the ground for the direction that Zuckerberg is taking Facebook.

Sir Martin Sorrell, CEO, WPP

Looks potty on the surface and at first blush. Also looks like a successful attempt to top Google in the bidding process. But you can't criticise Facebook's and Mark Zuckerberg's track record. Maybe he knows another thing we don't know?! It will inevitably pump up valuations, at least temporarily. Looks like a defensive move to me, with a big stock component. Maybe it says something about the Facebook share price?

Ron Peterson, social lead, AKQA

Facebook’s $19bn dollar acquisition of WhatsApp, the mobile messaging service used by over 450 million people, has been the deal heard by all. What will change? What’s next? And given Facebook’s pressure to appease shareholders, how will Facebook monetize their new platform?It’s in Facebook’s best interest to not monetise WhatsApp via advertising. If we look at the most successful emerging platforms coming out of Asia, (notably WeChat and Line), we see a new breed of social platforms emerging. These platforms are powered off of an entirely new business model drastically different from what we’re traditionally used to with Facebook, Twitter, and Google+. WeChat and Line monetise themselves through transactional fees from cash transactions (think Paypal), sticker sales, brand accounts (brands have to pay to have a presence on Line), or other non-intrusive streams of revenue. It’s a brilliant model that frees mobile messaging services from having to rely on advertising sales, and instead, enables them to design an experience relentlessly focused on the user. It’s no wonder they’re so successful.It would only be in Facebook’s best interest to elevate this model, rather than interrupt it. And without sponsored ads, will brands come to WhatsApp? Brands will always go to where the consumers are. With 1/2 billion users…that surely won’t be a concern.