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Apptension, July 18th, 2017

What Drives The Growing Popularity Of Chatbots?

What Drives The Growing Popularity Of Chatbots?

The idea of chatbots is nothing new. What’s changed is that for the past two years companies have been more focused on creating them than ever before.

It didn’t, however, happen overnight.

People have been interested in creating a robot able to communicate with humans since the early 1960s (just to mention ELIZA, ALICE and  SmarterChild).

Since then, we’ve made a huge step forward.

We now have AI assistants like Siri and Cortana, home assistants like Amazon Echo or Google Home. There are more than 100,000 bots on the Messenger Platform alone.

chatbots in google trends

This Google Trends graph shows how the popularity of the term Chatbots has taken off since the beginning of 2016

According to Business Insider, 80% of businesses want to use chatbots by 2020.

In this article, we want to answer the following question:

 

Why did chatbots become popular?

Industry experts, including HubSpot founder and CTO Dharmesh Shah, list two main reasons for that:

  • Growing popularity of messaging platforms
  • Advancement in AI and machine learning

First, the way we communicate (and especially chat) has changed drastically since we’ve moved from phone calls to texts, and then to messaging apps.

Now the companies have realized realized that chatbots are able to help various industries to reach, engage and serve their customers like never before, 24/7.

Second, the current state of the AI, Natural Language Processing (NLP) and voice recognition enables bots to better understand users’ queries and to answer them accordingly. In fact, chatbots are becoming new interfaces in messaging apps, replacing many other mobile applications.

“What 1997 was to Internet and browsers, 2017 is to bots.” – Dharmesh Shah, HubSpot founder and CTO

Let’s take a closer look at the factors that made chatbots so popular.

 

Messaging platforms trumped social networks

Chatbots have become a vital part of messaging platforms’ ecosystem.

In 2015, top 4 messaging platforms exceeded the biggest 4 social networking apps in the number of monthly active users, according to Business Insider.

chatbots trend

Source: Business Insider

In April 2016, Facebook introduced their Messenger developer platform, opening up for bots developers. Facebook’s bet on chatbots was aimed to simulate “one-on-one conversations between users and companies [to] expand its reach in customer service and enterprise transactions”.

As the Messenger alone has already 1.2 billion monthly active users, and Facebook is reaching almost 2 billion people, there are vast possibilities of using the data collected by the company to create more personalized chatbots, able to e.g. book a flight or make payments.

“Chat apps will come to be thought of as the new browsers; bots will be the new websites. This is the beginning of a new Internet.” – Ted Livingston, founder of Kik

Another thing is that the way we expect brands to communicate with customers has also changed. Today, we want companies to be available 24/7. This is now possible with bots, which can answer the majority of questions and to respond immediately. And, if needed, a human consultant can jump into the conversation at any time.

business availability

Source: The 2016 Mobile Messaging Report

Given that more than 65% of Millenials, Gen Xers and Boomers consider messaging their primary method of communication, chatbots may also increase the tech adoption amongst generations, helping brands to reach broader potential audience.

 

Bots are the new apps

Let’s face it – users are tired of apps.

Since the introduction of iPhone and the App Store, programmers worldwide have developed more than 6,5 million apps for all platforms.

the number of apps in 2017

Source: Statista.com

Users and brands are fed up with apps for various reasons.

For users, it’s become exhausting to install new apps and learn how to use them just to abandon them after few days.

Actually, 23% of users abandon the app after just one use, according to Localytics survey based on 37,000 apps.

Brands, on the other hand, find it harder than ever to acquire new users, as the competition became fierce. And, considering the high cost of developing the apps and the abandonment rate, many companies realized that it may not be cost-efficient to build their own, branded apps.

Here’s where the chatbots come into play.

They are cheaper, easier and faster to develop and experiment with, making them a great tool for companies to test and implement their campaigns. As for the users, they are also easier to install and use, since everything takes place in a messaging app.

 

Bot platforms and developer tools

The biggest tech brands like Facebook, Microsoft and Google made their bet on bots, introducing their own bot platforms.

After acquiring API.ai, Google reached around 60,000 bot developers. There are now over 45,000 developers on Microsoft’s Bot Framework, and around 34,000 developers use the Facebook’s Messenger Platform.

For Facebook alone, it resulted in more than 30,000 bots being created in the first six months after introducing its bot platform, Wall Street Journal says.

There are also other platforms for bot developers available, such as the Telegram Bot Platform, and bot stores like Botlist or Kik’s Bot Shop.

Furthermore, developers can use tools like IBM’s Watson Conversation or Amazon Lex, based on deep learning algorithms and Natural Language Processing to build conversational interfaces of their bots.

Microsoft CEO Satya Nadella says that chatbots will become the new interfaces, calling them “conversations as a platform”. He compared conversational bots to breakthroughs like graphical user interfaces, browsers and touchscreens.

“Chatbots will fundamentally revolutionize how computing is experienced by everybody.” – Satya Nadella, Microsoft CEO

The popularity of chatbots has resulted in 59% of US Millenials and 60% of gen Xers using them on messaging apps so far. And the numbers are still to grow.

us chatbots use

Source: BI Intelligence

 

Conclusion

Although the chatbot experience is not yet perfect with chatbots, they are far better than they were just a couple years ago.

They are now able to assist us in some basic tasks that may be automated, saving our time and money.

And given the popularity of messaging apps and the way that chatbots fit this platform, plus advancement in AI, machine learning and NLP, the trend of developing more and more chatbots is not going away.

Thing to be discussed next is not whether the chatbots are here to stay, but what kind of bots we actually need.

 

Now, we’d like to ask you one question:

Which industries are, in your opinion, yet to be disrupted by the chatbots?

Leave the answers in the comments, we’d love to read your thoughts about it!

P H