CMO's Guide to Chatbots
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Strategy

CMO’s Guide to Chatbots

by Ad AgeJanuary 9, 2017

Chatbots are the next phase in the migration from a desktop-dominant world to a mobile one. While bots are still nascent, as technology improves they are poised to replace brand websites and individualized apps.

Of course, chatbots aren’t a new phenomenon, but they generated buzz this year when Facebook opened its Messenger platform to third-party developers. Facebook went from having zero bots in February to 18,000 by July, according to research firm Forrester. And in the first seven months that Kik introduced promoted chat, its 200 million registered users exchanged 350 million messages with bots.

Messaging apps are gaining in popularity, especially among younger consumers, as app fatigue settles in elsewhere. Consumers use only 25 to 30 apps on average each month and spend 88% of their time in just five downloaded apps, according to Forrester.

As brand apps lose their luster, marketers need to reassess how they connect with consumers in a mobile-first world. Chatbots are one way they can speak with consumers one-on-one in a place where they are already spending the bulk of their time.

“Chatbots will replace the search window,” said Will Wiseman, chief strategy officer, PHD U.S. “There will be a rapid decline in app usage. The last three years, we have gone from brands’ desire to have mobile-friendly websites, then apps, and [we] now expect to see app activity get cannibalized by bots.”

But before you get chatty, here are some basics on bots.

What’s a chatbot?

A chatbot is an application typically powered by artificial intelligence that is designed to simulate a conversation with another human.

What are the benefits of bots?

Bots allow for a two-way, personalized interaction between the consumer and a brand and provide an ease of access and immediacy that can’t be achieved via email, filling out a form on a website or even through tweeting, said Jeff Malmad, managing director-head of mobile and Life+ at Mindshare North America.

But the benefit of bots isn’t necessarily to reach a large audience. While scale will likely come, Mr. Wiseman said right now bots are most useful to provide brands with data to help them better understand their consumer.

Are bots right for my brand?

Service-oriented brands stand to benefit the most from bots. Travel companies such as airlines and hotels can use bots to streamline the process for booking a flight or room.

Bots can also be beneficial to categories that are more reliant on curation like fashion and home goods, Mr. Wiseman said. For purchases that are typically research-intensive and require digital tools and additional content, bots can help expedite the process.

And for brands where customer service is notoriously difficult, bots can lighten the load of customer service reps and alleviate consumer irritation.

“Look at your current digital assets. If your brand is constantly communicating back and forth with the consumer, a bot may be a good option,” Mr. Malmad said.

How can I use bots?

There are three primary ways brands can use chatbots: to provide content, facilitate a purchase, and connect with consumers, Mr. Malmad said.

News organizations like CNN are using bots to serve relevant articles to users. Instead of going to the site every day, users can receive pushed content that interests them right in messaging apps.

Bots also allow consumers to make purchases directly in messaging apps. Pizza Hut, Taco Bell, Burger King, and Domino’s Pizza have used chatbots to allow customers to order food.

According to a survey from DigitasLBi, 37% of people are willing to make a purchase through a chatbot and would spend an average of about $56 per purchase.

And live chats with customer service reps that have historically occurred on a desktop can now take place with a bot.

While utility bots are probably the most relevant, there are other creative ways to use the technology.

CoverGirl is experimenting with bots that emulate social influencers. The makeup brand created a chatbot version of Kalani Hillker, one of the stars on Lifetime’s “Dance Moms,” that was designed to mimic her real conversational style. Mattress startup Casper built a chatbot for insomniacs that’s only available between 11 p.m. and 5 a.m.

Who is the audience?

“Bots typically attract a younger, more tech-savvy consumer who is just as critical as they are delighted by innovation,” PHD’s Mr. Wiseman said. This audience is also more apt to do some digging to find the bot. According to the survey from DigitasLBi, nearly half of millennials have or would be willing to receive recommendations from a chatbot.

What’s the downside to bots?

In this early stage, there are still plenty of limitations to bots.

The technology is not developed enough to enable effortless dialogue between human and bot. Conversations mostly rely on scripted dialog and require some human intervention. The more bots are used by consumers the smarter they become, but this process takes time and will result in some mediocre or downright bad experiences for the consumer in the process.

And there’s always the risk of getting punked. Some consumers test the boundaries of the technology by trying to get bots to say something profane or respond to something silly, Mr. Wiseman said.

That happened last March to Microsoft’s Twitter chatbot Tay, which was designed to mimic the language patterns of a 19-year-old girl. Twitter users tricked the bot into making sexist and racist remarks, and Microsoft was forced to pull the plug on Tay less than 24 hours after it was introduced.

But Microsoft is trying again with a new Kik chatbot called Zo, which won’t talk politics and avoids racism. The company said its goal for Zo is to advance the conversational capabilities within its AI platform.

What platform should I use to host my bot?

There are plenty of messaging apps that welcome third-party developers, the most prominent being Facebook Messenger. There’s also Kik, Telegram, and Blend, among others.

The platform you choose to host your bot depends on the type of customer you are trying to reach. Kik, for example, is associated with a younger consumer, with its sweet spot between the ages of 13 and 17.

Facebook already has a large user base to on-board to Messenger. It also has a plethora of data at its disposal to facilitate natural language.

Another option is virtual assistants like Amazon’s Alexa, Microsoft’s Cortana, and Google Assistant. Brands can build a skill for Alexa or partner with Google Assistant to supply content. These platforms are a good entry point but don’t necessarily offer a deep level of interaction with consumers.

How do you measure the success of a bot?

Bots offer plenty of analytics for a brand to assess such as engagement levels, conversation length, sentiment analysis, response rates, bot mentions and clickthrough rates. This can allow marketers to close the loop on engagement and sales.

 

From AdAge.com, 01-03-2017, copyright Crain Communications Inc. 2013

This article was written by Jeanine Poggi from Ad Age and was legally licensed through the NewsCred publisher network.