Line, a messaging application, today announced that it’ll release “Line Free Coin” services to Android users in 7 Asian countries (Japan, Taiwan, Hong Kong, Thailand, Indonesia, Malaysia and Singapore) in mid-January. This new launch will enable users to earn Line Coins, the company’s virtual currency, by watching promotional videos. Users in turn can use the coins to buy sticker packs or other digital content.

 

Digital video advertising remains one of the most lucrative advertising formats for businesses today. By releasing promotional video ads similar to Facebook’s auto-play video advertisements, Line is introducing video ads to its own platform to attract advertisers. This will enable Line to generate larger revenue compared to display advertisements as video ads allow brands to illustrate their product benefits better, capture the target audience more deeply, and demonstrate product features more thoroughly. By granting advertisers richer, more powerful advertising approach, Line in turn can request higher prices. Additionally, by launching “Line Free Coin,” Line will increase the chance of its users consuming the video content which in turn will allow Line to showcase that advertisers will yield a greater bang of their buck.

 

That said, while Line’s advertising strategy seems sound, it can nevertheless backfire. By rolling out video advertisements, Line is undoubtedly affecting the user experience – a major concern other social platforms such as Facebook are encountering. Though Line’s attempting to enhance of the appeal of its video ads, it may still cause some, if not a lot, of its users to use other messaging tools instead. By introducing video advertisements, Line may induce its users to utilize messaging services from competitors such as WeChat, WhatsApp, and even Facebook Messenger. After all, these competiting services provide similar services as Line and are ads-free. Moreover, these services give users the most vital and fundamental feature that all consumers want: the ability to chat as well as share photos and videos with their friends easily. Hence, by following the footsteps of companies such as Facebook that are ridiculously advertising-driven, Line may find themselves struggling to balance between serving their users’ needs and creating a viable advertising business. However, if they can highly relevant advertising content to their users, Line may be able to reduce the resistance.

 

Ultimately, Line needs to find the perfect balance between giving users as well as advertisers what they want in order to operate its business in the long-run.