the rise of messenger apps & the advent of ‘conversational commerce’

PowerPoint Presentation

3XE DigitalCroke Park, May 11th 2016

PROPRIETARY AND CONFIDENTIAL 2016

First of all I just want to say its a pleasure to be here today at 3XE and really looking forward to the next sessions that the guys have lined up namely

The Search Marketing conference in October and the Mobile & Data Marketing in Jan 2017, speaking of mobile....

The rise of messenger apps & the advent of Conversational Commerce

Twitter: @Dave_Haze


This morning Im going to take a quick look at the rise of messenger apps & the advent of Conversational Commerce

If you find any of this interesting or, for that matter just want to say hello you can contact me on Twitter and Id be happy to connect

Source: Bi Intelligence


So...Back in March 2015 Business Insider reported that the big four messaging apps had caught up with with the social networking apps. Thats WhatsApp, Facebook Messenger, Viber & WeChat

Then, Jan 4th of this year they announced that messaging apps had in fact surpassed social networks.

Now, there are seminal points in time that we have to say to ourselves, hmmm thats pretty important.

Now there have been many Social Networks,

Think Six Degrees which is widely considered to be the first social network.

It launched in 1997 and grew to around 3,500,000 registered users and was sold to YouthStream Media Networks in 1999 for $125 million.

Friendster was founded in 2002 and at its peak had more than 100 million users. Sadly, after many struggles to re-invent itself, Friendsters doors closed on June 14, 2015.

From 2005 until 2008, Myspace was the largest social networking site in the world, and in June 2006 surpassed Google as the most visited website in the United States.

There are hundreds, if not thousands of reasons that social networks decline. But the Swiss Federal Institute of Technology studied networks like Friendster and Myspace with the goal of figuring out what kills a social network. They found that

when the time and effort (the costs) associated with being a member of a social network outweigh the benefits, then a decline in users becomes likely. If one person leaves, their friends become more likely to leave and as more people leave, this can lead to a cascading collapse in membership.

Thats interesting because, as a professional in the industry with a particularly interest in social I was finding that I was spending less and less time in the feed....Feed Fatiuge.

We all know from Game of Thrones that empires come and go, that things change, it seems social networks as we know them are experiencing this change.

By 2020 5bn people on earth will have smartphones4Source: Benedict Evans, Mobile is eating the world


This makes sense though, because think about it there is a fundamental shift occurring in mobile

This stat here is from Benedict Evans (A16Z) presentation Mobile ate the World what we are seeing is fundamental shift in scale from 300M PCs to 1.5B smartphones and growing (up to 5B in 2020). Future belongs to mobile.

This represents a seminal shift for social as we say bye, bye to desktop.

Think about it 52% of Facebooks 1.6bn active monthly users only use it on mobile.

Source: EMarketer


So the future looks bright for messenger apps, of the 5bn people that will be using smartphone its expected that roughly 2.5 billion people will be using messaging apps by 2020

Is it just mobile thats at the heart of this shift? No....

1. Ubiquity


Well, primarily, falling data prices, cheaper devices, and improved features are helping propel their growth.

One reason messaging apps spread so quickly with younger generations is due to the fact that they became known as the free alternative to text messaging. Whether you are talking to someone across the street or across the globe, most messaging apps enable you do to do so over WiFi without cost or impact on your mobile data limits.

7

2. Asia


Secondly, mobile innovation driven in part by innovation in the Asian market. Think Weibo and Tencents WeChat, which reports over 700 million active monthly users who can do a variety of things beyond messaging.

WeChat users can do much more that simply message each other they can play games ,buy tickets and book and pay for taxi rides.

Source: http://www.pewinternet.org/2015/04/01/us-smartphone-use-in-2015/

3. Consumers


And finally, shifting consumer behaviours.

For example, the younger generation are transitioning out of using what we might term broadcast social medialike Facebook and Twitterand switching instead to using narrowcast toolslike Messenger or Snapchat. Why?

As social media usage has spread beyond the young, social media have become less attractive to young people......Feed Fatigue

Teens engage in complex management of their self-presentation in online spaces; for many platforms like Snapchat, that promise ephemerality, are a welcome break from the need to police their online image

They have a Public & Private self. They understand that posting their entire life online is not wise. In response, many of them seem to be using social media more strategically. They carefully curate the content they post on their public profiles on Facebook or LinkedIn, and save their real, private selves for other platforms like Whisper and Secret

But its not just young people, recent Pew research reports that while nearly 50 percent of smartphone owners in the US market 18 to 29 use messaging apps, nearly 40 percent of those 30 to 49 do as well, and nearly a quarter of those 50 and older do so too.

Theres gold in them thar hills!


But ultimately they are are more than just messaging apps! We need to see the real potential that they hold, while their primary function enables one-to-one or one-to-few interactions in a fast, often cost-free way they remove barriers to all digital interactions and transactions and the commercial opportunities that this brings, is, to say the least, a mobile gold rush.

Its little wonder, Mark knows theres is gold in them there hills, thats why hes doing an excellent job at brushing up on his Mandarin and jogging around Tiananmen Square. He sees the opportunity.

FB Messenger & KLM


This is reflected in the recent developments to their Messenger platform.

Like WeChat its now possible to send and request money. get status updates from participating retailers via its Business with Messenger capabilities...and even order an Uber.

More recently Messenger announced a partnership with KLM Airlines which now allows Messenger users to get status updates and resolve customer service issues inside of the app including rebooking flights an obvious link to commerce.

Conversational CommerceSeamless and fluid experiences


All of this signals the advent of a new type of commerce, powered in part by mobile technology which answers our desire for what Mo Mozafarian, Founder @relevant_ai calls Seamless and Fluid experiences or as I mentioned earlier removing the barriers to all digital interactions

?


Quick geek quiz, anybody know who this is?

Chris Messina, Developer Experience Lead at @Uber & inventor of the hashtag

Messina asserts that 2016 will be the year of Conversational Commerce and by this he means utilizing chat, messaging, or other natural language interfaces (i.e. voice) to interact with people, brands, or services that heretofore have had no real place in the bidirectional, asynchronous messaging context.

The net result is that you and I will be talking to brands and companies over Facebook Messenger, WhatsApp, and other messaging services like Telegram or Slack, and elsewhere before years end, and will find it normal


At the moment there are essentially two ways of interacting with Messenger services - Human centered services like Magic and GoButler and the rising stars of the tech industry bots

Unless youve been living in a cave bots are a hot topic this is driven in part by the advances in AI.

Chat bots are computer programs that mimic conversation with people using artificial intelligence. They can transform the way you interact with the internet from a series of self-initiated tasks to a quasi-conversation.

By 2020, the customer will manage 85% of its relationships with an enterprise without interacting with a human

Source: Gartner: http://www.gartner.com/imagesrv/summits/docs/na/customer-360/C360_2011_brochure_FINAL.pdf


By the way this prediction was made in 2011 by Gartner Predicts -


This prediction got a recent boost with Facebooks recent launch a bot store for Messenger at the recent F8 conference, Facebook were not the first company to release a bot store for its messaging app. There is a bot store on Telegram and on Kik.

Its early days yet and bots are to be honest quite buggy but as Jonathan Libov from Union Square Ventures, has observed, developer interest in messaging/bots has far, far outpaced consumer interest thus far. But its only a matter of time.

Bots

The next gold rush!


So will bots be the next gold rush? Probably, And they will be more than likely the driving OS behind Conversational Commerce.

However. that remains to be seen, but if I were a betting man, Id wager a few quid.

So what does all this this mean for businesses and brands?


Well, its important to start looking at messenger messenger apps as part of the social media eco-system and how they can serve as an additional component of your overall mobile marketing strategy.

Case in point on WhatsApp, for instance, the shoe brand Clarks in collaboration with BBH Labs avoided an overt sales pitch, and instead created three virtual characters to promote its classic Desert Boot, allowing users to connect to them on the app to receive messages, videos and music playlists.


To be a successful advertiser on the web in the future, you will need to build content based on many, lightweight interactions over time.

Paul Adams, VP of Product @Intercom


Back in 2012, Paul Adams VP of Product @Intercom. Before that Facebook and Google said this.

Messenger apps, and the advent of Conversational Commerce offer us and (brands) the opportunity to engage in many lightweight interactions.

Messenger paltforms and the idea of Conversational Commerce offers us the opportunity to create deeper advocacy with your audience. This is nothing new, think SMS...

Email Open RateSMS Open Rate22%98%90minResponse time90secResponse timeThink SMS VV


Its no wonder that The Coca-Cola Company says it spends 75 per-cent of its mobile budget on SMS marketing


In 2014 Hellmans in Brazil used WhatsApp in an innovative way to create utility and at the same time build a database of consumers. Think CRM, why get their email when you can get their mobile number?

In conclusion think..

Trial, experimentation, pro-typing

Less on promotion, more on storytelling, entertainment or utility Context, relevant moments


Thank you


the rise of messenger apps & the advent of ‘conversational commerce’

Social Media