US Insights

Are chatbots and AI the new apps?

David Wright

Innovation Specialist

Social 04.13.2016 / 10:35

Social chatting 2 col

Kantar observations on Facebook8 and the bot-shop arms race

Messenger apps such as Facebook Messenger, Snapchat and KIK have been experiencing enormous growth. Facebook messaging lead David Marcus just announced that its Messenger reached 900 million monthly active users on April 7. As recently as January, Marcus had announced reaching 800 million.

However, as we have discussed here, messenger sessions on average tend to be short: less than 120 seconds. So to further engage these massive audiences, the competing companies have come up with two main strategies:

Strategy #1: Focus on rich content creation by providing content creation tools for its user base and rich branded stories from its commercial partners, a la Snapchat.

Strategy #2: The newer strategy is to allow developers to create chat bots, which allow users to interact with brands and services via the interface they are used to, mobile chat. 

What is a chat bot? A chat bot is a small AI program designed to simulate a human conversation. Chat bots are not really new; one of the first documented was created in 1966 and named Eliza. Malicious chat bots used to run on the former Microsoft Messenger, largely designed to extract personal information.

chatbot example

Why are chat bots suddenly a hot topic? It is really due to the convergence of three things: primarily mobile penetration, plus the rise of messenger apps and recent rapid advances in in AI (which enables a chat bot to have a more detailed and human-like conversation).

It is also seen as a new revenue generator, the new app store, built within Messenger APPs, bypassing app store submission and revenue sharing controls.

Finally, chat bots could be a potentially lucrative way of moving customer service interactions, into messenger apps.

Who has launched a bot store? As expected, Facebook just launched its store at F8. Interestingly, Facebook is providing developers access to an advanced natural language engine (via its acquisition) which will allow developers to create bots that continuously learn over time. Facebook also has the advantage that its rich profile data will enable developers to create highly personalized bots. They launched with these bots (which you can test it you have the latest Messenger update):

Lifestyle: 1-800-Flowers; CNN; HealthTalk; HP; Operator (find bots); Poncho (weather reports); Spring (Shopping concierge); Wall Street Journal

Entertainment: Sequel Stories (adventure stories)

KIK launched its bot store on April 5 with 18 bots with The Weather Channel, Sephora, H&M, Vine being the key launch brands.

Amazon, via its Amazon Echo product, launched a “Skills Store” in November 2014. While the Skills Store would theoretically allow developers to develop a voice-based chat bot, it is mainly about actioning commands such as tuning in a radio station or turning down the heating.

Instead of a bot store, Microsoft has been releasing tools for developers to create their own AI bots. Some of its public experiments such as its Tay chat bot, however, show that AI cannot be left to its own devices.

So, what is the difference between a chat bot and a digital assistant? The lines can blurry, but a digital assistant is designed to help you by answering questions, like a SIRI, whereas a chat bot is akin to dealing with a company representative.  

However, there is no reason why a chat bot could not tailor its service based on the data you might choose to share with it. For instance, an insurance chat bot might ask to connect to your Fitbit data and offer ways to reduce your premium if you are in the "danger zone".

Is the West just catching up with the East? China’s WeChat has long been pursuing messenger engagement strategies. On WeChat (China), you already can buy anything from (similar to, book and pay at a restaurant (via, order a taxi, buy plane or train tickets, share your health data, or find a date. It is also pursuing a content strategy, with thousands of content channels (subscriptions) being created by businesses and individuals every day.





Source: Kantar

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