Are chatbots the future of online business?

robot art 2

This article by Rob Lever and Sophie Estienne appeared in Yahoo! Tech April 14, 2016:

Washington (AFP) – An artificial intelligence “chatbot” from Taco Bell now lets you order a meal in a smartphone text exchange that might look something like this:

TacoBot: Hello there, I’m your TacoBot, I can help you order a meal for you or your team.

You: Can I order one soft taco with beef?

TacoBot: Sounds good… do you want to keep adding stuff? Maybe some bacon?

Brands like Taco Bell and tech companies large and small are betting that more and more people will start using this “conversational” way of interacting online instead of clicking through on-screen menus.

If the trend catches on — as firms like Facebook and Microsoft expect — it could transform the digital landscape by allowing smartphone users to find information or make purchases with simple text messages, bypassing apps and search engines.

Among the companies already developing or launching chatbots are the Wall Street Journal, CNN and retail giants Sephora and H&M.

“I believe we are headed to a shift where this becomes one of the primary means we interact with the digital world,” says Mark Beccue of Mark Beccue Consulting, who follows trends in the messaging market.

“The chat user interface is what makes sense for a mobile-first world. You can be more specific and be quicker.”

– ‘Bots the new apps’ –

Chatbots are already popular in China, where a system powered by Microsoft offers a variety of services for users of the popular messaging app WeChat.

Messaging services have become a natural place for chatbots to reside, since their usage is growing: at least 1.4 billion people used a messaging app last year, says research firm eMarketer. According to Business Insider Intelligence, the “big four” messaging apps have overtaken the largest four social networks.

Facebook this week also made a major push in this area, opening up its Messenger application — and its 900 million users — to “bot” developers.

“We think you should be able to text message a business like you would a friend, and get a quick response,” Facebook co-founder and chief Mark Zuckerberg said.

The idea is to create a seamless experience for end users, who can access services directly via a messaging app by chatting with a “bot,” which appears alongside their regular contacts.

Microsoft unveiled a similar effort last month, as CEO Satya Nadella described a push into “conversations as a platform.”

“Bots are the new apps,” Nadella told developers.

The messaging service Kik meanwhile launched its own “bot shop,” with partners including retailers, game developers and services such the Weather Channel.

Kik said the move was a response to the trend of people using fewer apps and spending more time on chat platforms.

“There’s nothing to download, no new registration required, and you can use an interface you’re already familiar with: chat,” Kik said in a statement.

– Simple or smart –

Chatbots can be simple programs that provide answers to predetermined questions, or more complex ones powered by artificial intelligence.

“It’s a more natural extension of how consumers are used to doing things,” said Julie Ask at Forrester Research.

The intelligent chatbot movement suffered an embarrassing setback recently when Microsoft had to ground its “Tay” bot just a day after letting it loose on Twitter.

Internet users gamed the artificial intelligence — designed to improve the conversations — to cause Tay to spew out hateful and racist comments.

“‘Tay’ went from ‘humans are super cool’ to full nazi in <24 hrs and I’m not at all concerned about the future of AI,” quipped one user, @geraldmellor.

Analyst Mark Beccue said the Microsoft case was more of a science experiment “testing the boundaries of what artificial intelligence can do.”

“It was a case study they will learn from,” he said.

– Future path –

Some analysts remain skeptical however on chatbots as the wave of the future.

Jan Dawson of Jackdaw Research said the movement is largely driven by Microsoft and Facebook, two firms which would like a greater presence in mobile even though they don’t control the biggest smartphone operating systems.

For Facebook, which has invested heavily in AI, the “bot” movement — crucially — opens a door to monetizing its popular Messenger platform.


Changing Work Habits Fuel Worldwide Enterprise Messaging App Market, Driving Revenues near $1.9B by 2019

Compass Intelligence releases its latest research covering the worldwide enterprise messaging application market. A review of the market size, vendor share, and competitive review is provided from 2015 to 2019.


Compass Intelligence, a metrics-based market research and analytics firm, released new research this week on the worldwide enterprise messaging app market. The worldwide enterprise messaging app market will reach more than $1.9 (USD) billion in revenues by 2019. The modern dispersed and mobile workforce is finding productivity, collaboration and communications challenged by current business tools. A potential solution, Enterprise Chat Platforms–consumer-friendly, chat-based platforms, which manage internal and external communications as well as business applications for the modern workforce. Not only do these enterprise chat platforms have the potential to improve work efficiency, they may also spawn significant innovation and disruption in the broader business application ecosystem. This report explores the market drivers and challenges for enterprise chat platforms and enterprise messaging apps, detailed review of the major players, vendor competitive analysis and 2015-2019 revenue and user market size/market share.
“Market drivers are in place to force a significant innovation in work efficiency, and the key is messaging, or chat,” explains Mark Beccue, Senior Contributing Analyst at Compass Intelligence. “Chat and the Conversational User Interface (CUI) will increasingly become the prevalent user interface for both consumers and business, overtaking the graphical user interface for computer interaction.”
Some of the key questions and topics explored in this study include the following:
What will be the impact of messaging on enterprise?
Will chat platforms evolve the use, effectiveness of business applications? How will they succeed where enterprise social networks have failed?
Will chat become the dominant interface for computer technology, replacing the Graphical User Interface (GUI)?
How will enterprise chat platforms evolve collaboration, productivity, communication?
Will one/few platforms dominate or will chat and messaging disperse into business apps?
Which platform model will succeed – Open platforms/API integration or “Walled Gardens”?
Are chatbots a game changer for productivity, collaboration?
Who will be the winners and losers with the emergence of enterprise chat platforms?
What business models will succeed?
Will chat platforms be focused on internal use only, or will they be able to bridge enterprises to partners and customers?
How challenging is security and compliance?


Key vendors or applications explored, mentioned, or reviewed in this research include Convergely, Meekan, Roomino, DBot, Slack, Atlassian (HipChat), Facebook At Work, Microsoft (Yammer), IBM (Connections), SAP (Jam), Cisco (Spark), RingCentral, CA Technologies , ChatGrape, Jandi, Symphony, TigerText, Carii, Red E App, KORE, and BaseCamp.


To get more information including the table of contents, list of figures, and introduction to the market, please click here:

Are chatbots the next big step forward for mobile marketing?


The following is a repost of Chantal Tode’s article in Mobile Marketer from March 29, 2016.

Microsoft’s recent chatbot disaster notwithstanding, an explosion of relatively easy-to-develop messaging interfaces is expected this year as marketers look to capitalize on the time spent in Facebook Messenger, Kik and other similar apps.

With mobile users typically spending most of their time in just a few apps, marketers are looking beyond their own branded apps. Chatbots, which are mini interfaces inside a messaging app, are a focus because they are easy to develop and can be deployed across multiple platforms but, as Microsoft’s experience with a bot that quickly became a PR nightmare shows, the opportunity comes with its own set of challenges.

“Every brand that you can think of will have to have a bot to engage with their users, to enable them to communicate with them and find them,” said Beerud Sheth, CEO of Gupshup. “It is going to affect every brand and every business.

“It is going to happen very quickly. I expect a bot explosion by the end of this year.”

App fatigue
A number of big brands are reportedly either looking at or actively developing chatbots. The idea is to enable messaging app users to order a pizza, shop and bank directly from within the app by sending a text message to a restaurant, a shop or a broker.

The primary reason for the interest is that, after investing heavily in developing mobile apps, customers are not spending as much time in them as marketers expected.

From a user perspective, it is a nuisance to have to keep downloading apps, maintaining them, switching from one to another and finding the app you need at the right moment.

As a result, users are increasingly spending time in just a few apps, with messaging apps among the most popular with users. With this in mind, messaging apps are opening up so developers can create services within the apps.

“I believe chatbots will be big,” said Mark Beccue, principal analyst at Mark Beccue Consulting Inc. “Consumers have app fatigue, in that most spend a majority of their time in a small number of apps.

“The most popular apps, such a messaging apps, will become platforms to which other apps integrate to,” he said. “One of the most logical types of apps for this purpose is the chatbot.

“The reason is because they are relatively simple to develop, can be deployed across multiple platforms. Chatbots are also appealing in that consumer interaction is very natural – it’s chat – which is becoming our preferred option for communication.”

Bad bots
One of the more visible chatbot experiments so far is Microsoft’s Tay, which was supposed to have the voice the of a teenage girl but, through the use of machine learning, soon started sending racist, sexist messages.

The example is a cautionary tale for marketers. As mobile marketing evolves, they need to make sure they fully understand each development before diving in.

The Microsoft example could temporarily dampen interest in chatbots, although most will not be AI-driven as Tay was. It also points out how bots with a more specific job – as opposed to the more open-ended Tay – could make more sense for marketers.

“In regards to Microsoft’s misstep, I think that is definitely an event that hurts the image of chatbots and will slow their adoption for marketing purposes,” Mr. Beccue said. “Twitter bots have given chatbots a bad reputation and this makes it even worse.

“The use case for chatbots for the foreseeable future are more along the lines of the chatbots on Slack and Kik – these bots exist to make your life easier.”

Taking off
The trend has already taken off in China, where a number of big brands are on WeChat.

In the U.S., early chatbots include Uber’s integration with Facebook Messenger, letting users order a ride from within a message.

More consumer brands are expected to jump onboard Facebook Messenger soon, with an announcement possible at the upcoming F8 developer conference, per Mr. Beerud.

Chatbots are also showing up on Kik, Slack and Telegram.

For chatbots to be effective, marketers will need to consider what constitutes an engaging experience for messaging app users.

Marketers will need to make sure chatbots are useful. On Kik, there is a chatbot called blynkstyle that helps users pick a fashion look.

Replacing traditional apps
Marketers also need to keep in the mind that consumers consider messaging apps as more private than social media.

Areas where bots are likely to take hold include being able to conduct research, access customer support and receive relevant alerts and reminders.

Ultimately, chatbots could even replace apps for many brands.

“I don’t have a Coke app or a Unilever app on my phone,” Mr. Sheth said. “Even though I consume all these brands, I don’t engage with them via an app.

“For all practical purposes, I do believe that bots will replace apps and Web sites,” he said. “It is going to be so much easier for consumers to communicate with messaging bots so that will be the primary way they communicate with brands.”