CMO’s Guide to Chatbots

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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…