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Home > Digital Marketing Blog > An Insight into Chatbots and their Effect on the Digital Marketing Industry

An Insight into Chatbots and their Effect on the Digital Marketing Industry

An Insight into Chatbots and their Effect on the Digital Marketing Industry
Harsha Chaitanya
December 15, 2016

A Chatbot is a mechanism used to substitute a human interactive service by equipping it with a set of rules to assist a conversation or a transaction. According to Wikipedia, it can be termed as a computer program which conducts a conversation via auditory and textual methods. Another prominent definition by a well known source known as Chatbot magazine connotes.

“ A Chatbot is a service, powered by rules and sometimes artificial intelligence, that you interact with via a chat interface.”

The Desideratum

By now, we can infer that the term Chatbot is not a newfangled concept. All of us from decades have been listening to the phone conversations by simulated voices. When we call a mobile service provider’s customer care, we go through a tedious layer mechanism where we were left with no choice other than to wait. Now, think of a business where the main motto is selling its services or goods, a prospective customer if put through this rather monotonous process of waiting, he may defer from the action. So according to the new age restless and a busy customer’s standards, the above old process may not yield desired results. As we say, necessity is the mother of invention. Here comes the idea of Chatbots.

The Timeline

The term Chatbot is coined by a Texas born scientist named Michael Lorin Mauldin. ELIZA can be considered as a first chatbot which was developed in 1966. It featured limited capabilities in simulating conversations which was a giant leap by that time. Another Chatbot named PARRY appeared in 1972. These two can be regarded as early interventions in the field of natural language simulation systems. All these programs included a set of responses which are pre-programmed to a set of queries in a meaningful pattern. Anyway the recent ones included Artificial Intelligence which enabled them evolve into more sophisticated systems which can perform complex tasks.

Types

By novice terms, Chatbots can be broadly classified into two categories.

  • Elementary systems like interactive voice services which operate by a set of rules which include phone tree conversations. These are severely limited by capabilities and the response mechanism are too slow as one has to wait and go through several layers until he gets what intended.
  • Advanced systems which use Artificial Intelligence to process the requests and act according to the user’s requirements. As they incorporate the complex capabilities of AI, they can mimic human capabilities up to a considerate extent. It enabled them to perform more interactive tasks by conversing to the customers in a human way and giving them the perfect solutions they want and took the whole experience to the next level of human to human interaction from a human to machine interaction. Chatbot platforms also exist namely Apple’s SIRI, Microsoft’s CORTANA, Google’s ASSISTANT which provide users with generic information rather than advertising.

Chatbots in Business

As the apps began to grow at an explosive rate, the organizations began to start their own apps sometimes one app for the whole services, sometimes different ones to different services. So in order to leverage the most out of these messaging and social media apps, they started developing and integrating Chatbots into them, which can update the customers with the latest products released, knowing their set of preferences, making them sign up, making them buy and ensuring them with delivery updates and the whole process zeroed on customer retention. Some of the Chatbots developed by magazines like TECHCRUNCH has its popular bot on TELEGRAM. It provides various informatory services like latest happenings in the tech-world and in turn promotes the subscription activities.

According to a web source, some of the firms which employed their bots on Facebook’s messenger were:

  • CNN
  • HYATT
  • UBER
  • BURGER KING
  • EVERLANE
  • DISNEY

According to Techpp.com, some of the Indian bots on MESSENGER include:

  • FIFY
  • LAWBOT
  • JUNGOO
  • YATRA

Tipping Point

Every trend needs a tipping point which makes it revolutionary. Coming to Chatbots arena, the F8 Developer conference by Facebook held in April, this year made the digital world to turn their radar on to the Chatbots. Facebook unveiled its new MESSENGER platform which is ready to accommodate Chatbots. As we know that the user base of MESSENGER is huge reaching 900 millions, firms started to launch their Chatbots on MESSENGER and started leveraging. CNN and 1-800 - FLOWERS were the first to start their bots on MESSENGER platform.

The Rise

According to Satya Nadella, CEO of MICROSOFT, they have been on the top in providing the bot framework as 45,000 developers were using it. Google also forayed into the arena and by their stats, around 60,000 developers started using their framework. So by the analysis and trend, companies seriously started to think about employing Chatbots to get their marketing done more efficiently and by a rough estimate 80 percent of the firms have their Chatbots by 2020.

So the time has come up for the Digital Marketing industry for a change. It has to use the technology and it means doing the things more efficiently in a personalized manner using Chatbots.

What Marketers Need to Know?

Apropos the surveys conducted in 2016, a peculiar thing is messaging apps are surpassing the social networks by a large scale. That means, the new age customers, particularly younger people were keen on spending their time most on the messaging apps rather than social network sites. Surprisingly, the retention rate of those customers who installed messaging apps is higher than the people who installed social networking apps. This clearly shows, what’s the future playground is and where to market the businesses.

As the Chatbot industry is still in its infancy and the usage is low in the marketing vertical, there is a vast innovation to be made. So by employing the bots on these messaging platforms, firms can provide the customers with a sense of more personalized approach rather than a machine interface as it used to be. The instant response and interaction systems provided by these Chatbots stay miles ahead of the traditional customer service lines and act fruitful. It helps firms in saving their costs on employing personnel for interaction services and the customer retention rate will be highly improved due to the instantaneous service nature. The marketing automation process will be highly effective with the Chatbots mechanism. Due to the fact that every brand has its presence globally and its span across various online channels, the updation and constant interaction via new information to the users became a very tedious process. It takes enormous amount of time as there is a vast pile of information to be updated and to remember the customer preferences and act personally to each of them will be a herculean task. So the Chatbots can be very effective when comes to performing all these tasks efficiently and can reduce a lot of human intervention. They helped the companies and customers to witness a hassle free process right from filling a document to enrolling a subscription to selling a good to ensure the delivery and what not. Online marketing firms across all verticals right from fashion to automobile, media to travel started using them.

P.S

It’s always salubrious to adapt to a change if its beneficial. That too, if it can metamorphose the whole marketing experience, it would be a crime not to be ready for that. So for the Digital Marketing industry, the next big thing will be Chatbots.