Chatbot Market: Key Companies Strive to Enhance Customer Experience to Expand User Base

The global chatbot market is extremely consolidated with leading three companies namely Facebook, Google, and Microsoft that collectively held a stupendous 97.5% of the market in 2015, states Transparency Market Research in a new report. Being well-established and recognized, these three companies enjoy brand name and most consumers prefer their products and services.

Yahoo Inc. is another significant player in the chatbot market that is popular among users. Howbeit, the massive volume of communication handled by messaging applications such as WeChat, WhatsApp, Line, Skype, Facebook, Twitter, and Kik leaves very little scope for the entry of new players. Competition in the market is stiff as players vie to outdo rivals by delivering better customer experience. They are striving to offer outstanding customer service to resolve customer complaints and issues which will help them steal a march over their competitors.

As per estimates of a report by Transparency Market Research, the global chatbot market will rise at a staggering 27.8% CAGR in terms of revenue over the forecast period between 2016 and 2024. Progressing at this rate, the market will become worth US$994.5 mn in 2024 from US$113.0 mn in 2015. In terms of enterprise size, large enterprises is anticipated to continue to remain key segment and generate a revenue of US$626.3 mn by 2024 end. This is because large enterprises extensively employ chatbot for digital marketing applications and also present a massive demand for chatbot to initiate business process automation activities.

Geography-wise, North America holds a massive share in the overall market; the region is anticipated to hold on to the leading spot over the report’s forecast period.

Use of Chatbots in Digital Marketing Activities Drives Growth

The primary factor boosting the growth of the chatbot market is vast development in artificial intelligence (AI), because of which chatbots have evolved from simple answer machines to a smart platform for engaging consumers. Businesses are also using chatbots for marketing needs that demonstrate the large spectrum capabilities and capacities of chatbots.

Apart from this, technological advancements leading to the implementation of artificial intelligence in consumer electronics is aiding the chatbot market to expand its consumer base. Over the past few years, voice and messaging services have become key and are likely to remain so over the forthcoming years. Businesses are increasingly adopting online messaging services and using chatbots for digital marketing campaigns for customer engagement and for lead generation. This is positively influencing the global chatbots market.

Lack of Application Areas Hurting Growth Prospects

The key factor challenging the growth of this market is the significant rise in the capabilities of chatbots which far exceeds the growth in the areas where they can be applied. Further, the growth of this market is restrained due to several hosting issues that need to be resolved. These include chatbot monitoring, management, security, and integration. The failure of hosting services to provide aforementioned services is restraining several enterprises to enjoy the benefits of chatbot. Nevertheless, chatbot as a service is likely to provide significant opportunities to the market in the forthcoming years.

 


How Marketers Can Start Integrating AI in Their Work

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STEPHEN SWINTEK/GETTY IMAGES

According to Constellation Research, businesses across all sectors will spend more than $100 billion per year on Artificial Intelligence (AI) technologies by 2025, up from a mere $2 billion in 2015. The marketing industry will be no exception.

AI holds great promise for making marketing more intelligent, efficient, consumer-friendly, and, ultimately, more effective. Perhaps more pointedly, though, AI will soon move from being a “nice-to-have” capability to a “have-to-have.” AI is simply a requirement for making sense of the vast arrays of data — both structured and unstructured — being generated from an explosion of digital touchpoints to extract actionable insights at speeds no human could ever replicate in order to deliver the personalized service consumers now demand.

Interestingly, in many cases, the sophistication of AI technologies has already advanced further and faster than most marketers’ ability to actually make use of them. On the one hand, there are the technical challenges of gathering and normalizing data inputs — the act of making different types of data comparable — connecting them to a unified view of the customer, and then aligning the AI-driven decisions to real-world actions. On the other hand, there are also real philosophical, ethical, or at least policydecisions to be made on the value exchange between marketers and consumers when data is shared and used to optimize marketing experiences.

The good news is that, as an industry, we are starting to see meaningful progress on both fronts. For businesses looking to keep pace with innovation and leverage AI, there are steps they can take today. But first, what are some examples of how AI can help make marketing more effective?

Using AI in Marketing

Smart marketers are developing, partnering to build, or integrating AI into their tech stacks to get better at what they do. AI is already being used in ad targeting and customer segmentation, but there are more possibilities in store such as:

  • AI-powered chatbots use all the customer data at their disposal to answer questions and give advice to customers considering making a purchase. Take Sephora’s Kik bot, which quizzes customers about their makeup preferences and then follows up with specific product information.
  • AI-enhanced image search allows users to upload pictures of products they are interested in, to find relevant shopping ideas. For example, companies such as CamFind let you snap a picture of something in the physical world, and get information related to it. Say you see a poster for a movie you’d like to see.  Snap a photo, and CamFind will show you movie recommendations, times, and locations.
  • Personalized training routines and nutrition information can be created based on data from other consumers with similar lifestyles. For example, UnderArmour leveraged IBM Watson’s AI to create a “personal health consultant” that provides users with timely, evidence-based coaching around sleep, fitness, activity, and nutrition.
  • Optimized advertising uses AI to make decisions based on the full range of data available — including unstructured data such as sentiment and mood. For example, IBM, this time as a corporate marketer, teamed up with MediaMath (where I am the CMO/CSO) to activate true AI-driven programmatic marketing using its Watson Cognitive Bidder, to extract predictive signals from exposure to large amounts of data.

How to Put AI Into Practice

There are three key areas of consideration to help you get started leveraging AI for marketing today: affirm your consumer data policies, make your data actionable, and select the right AI partner.  Let’s look at each in more detail:

Affirm your consumer data policies: Before getting started, it is important to confirm your policies regarding the handling of consumer data, transparency, and control.  Your company needs to make sure that you’re complying with the EU’s new General Data Protection Regulation (GDPR). Consumers should be able to interact with connected devices — from web browsers to mobile phones to voice assistants — knowing that their data is being used in transparent ways, in a manner consistent with their preferences and expectations, to which they have explicitly consented.

Make your data actionable: There are three pillars here to consider:

  1. Common identifier: With the explosion of devices, digital identity today is deeply fragmented, leading to head-scratching experiences where, for example, a gym franchise might roll out a great new membership offer…to someone who is already a member. The first step is to establish a common identifier, usually an alpha-numeric string, across various touch points and data sets to help create a unified view of the customer. Emerging solutions such as DigiTrust are helping marketers tie together their various touchpoints in a safe, respectful, and scalable way.
  2. Data gathering: AI can make sense of all your data and extract insights from it, but only if you can collect and normalize it before activating it. Choose a data management platform (DMP) that incorporates the identity solution selected above and can handle data from a wide range of sources, so you can collect, organize, and centrally manage all your data, segment it into granular audiences, and activate it for marketing in real-time.
  3. Data end points: The best customer experiences cut across touchpoints, whether they are “paid” (online, Connected TV, or digital audio ads), “owned” (your stores, websites, call centers) or “earned” (PR, blog posts, social media). Although there are as yet few platforms that can deliver marketing across all of these touchpoints, technology such as IBM’s cloud-based Universal Business Exchange can build upon the common identifier and data gathered to drive consistent execution across a range of platforms and tools.

 Select the right AI partner: With the policies, data assets, and pipes in place, the stage is set for AI to make optimal decisions and drive real business performance. For best results and fastest time to real return on your investment, be sure to choose a partner that has true AI, not simply rules-based decisioning, which is impossible to scale for the volume of data and combinations of interactions that marketers are managing today. In addition, be sure to choose partners with real experience addressing your particular use cases and working with your existing technology partners. Finally, as with any vendor relationship, be sure to check on your partner’s ethical and philosophical approach to AI, as this is still an emerging technology that demands thoughtful guardrails to produce effective results in a responsible manner.

AI is no longer just hype — it’s a “have to have” that you can start integrating into your marketing today with the steps outlined above.


This article was originally posted on –

https://hbr.org/2018/05/how-marketers-can-start-integrating-ai-in-their-work


About The Author

Dan Rosenberg is CMO/CSO at MediaMath.

Constellation Research : 46% of Companies are Investing in AI for Sales and Marketing Purposes

 

Artificial intelligence (AI) adoption is relatively modest across large enterprises, but marketing and sales organizations are embracing the technology most quickly.

Forty-six percent of companies are investing in AI for sales and marketing purposes, and 50% are deploying AI projects for commerce and customer service, according to a report released Thursday by Constellation Research. By contrast, 48% of firms said they do not plan to invest in AI for finance, legal and administration.

It’s much easier for marketers and sales teams to adopt AI because of the breadth of plug-and-play options in the market, said Courtney Sato, director of research development at Constellation and co-author of the report.

“They’re already using a CRM platform or some enterprise software that has an automated tool set built in,” she said. “All they have to do is turn it on and pay an extra fee.”

Despite marketer uptake, the report, which surveyed 50 C-level executives at large companies across 12 verticals, found enterprise investment in AI is modest across the board. Most companies (51%) are investing less than $1 million in AI, although 60% plan to grow their budgets by at least half this year.

“Even early adopters are not spending a lot on AI yet,” Sato said. “The budgets are pretty modest compared to everything we’ve been hearing about AI.”

Most companies are in the early stages of adopting AI. Forty percent of respondents said they’re investing in building a data lake and big data analysis capabilities, which can take up to two years. Just 30% are investing in predictive analytics and machine learning, while 22% are working on natural language processing and image recognition. And only 8% are building deep learning neural networks.

“Companies are investing in the foundational technologies,” Sato said. “They need data lakes and statistical analytics, so they’re going to invest in those first. They don’t have the appetite for the more cutting-edge technologies.”

How they’re doing it

Depending on what the AI is being used for, companies have three options for deploying it: build their own infrastructure, leverage computing power from providers like Google or Amazon or license off-the-shelf tools from platforms such as Salesforce or Oracle.

Each option has its pros and cons, Sato said. Building AI infrastructure is a huge and long-term investment, whereas working with a vendor or cloud provider can allow companies to start using AI more quickly. But organizations choosing to leverage or license should be wary of getting locked in with a cloud provider and aware that out-of-the-box AI tactics aren’t very flexible.

“Contracting with a vendor is helpful if you don’t want to build the back-end infrastructure,” Sato said. “The drawback is it’s not as customizable, and then you face lock-in.”

Companies that want to own their AI technology need to source from a limited and competitive talent pool. Eighty percent of respondents told Constellation they need to bring on more employees to implement AI solutions, and 40% said they’ll need to hire a “significant” amount of new talent.

Attracting talent will be tough, especially when competing with large tech and consulting firms with deep pockets, Sato said.

“If you have someone good, big tech companies are going to come after them,” she said. “It’s going to be a difficult decision for the employee not to go there.”

Because of these challenges, most companies are taking a hybrid approach to adopting AI. Twenty percent of respondents said they are both building and working with a cloud provider or vendor, while 26% said they’re doing all three.

“This is the fastest way to dip your toe in the water and then decide which strategy works for which project,” said R “Ray” Wang, principal analyst at Constellation.

Friction and oversight

Companies are cautious about deploying AI because it will fundamentally change the way their organizations function. It will also demand new roles and skills and affect roles beyond manual jobs.

Fifty-four percent of executives told Constellation they’ll need to understand how to restructure their business to accommodate AI, while 50% say they’ll need to acquire data expertise. Forty-eight percent said they need to learn how to manage an AI-augmented team.

Just 6% of executives said they don’t expect their roles to change as their organization adopts AI.

“Most executives are going to have to understand how an algorithm works and how to identify false outcomes,” Sato said. “After a while, I’m not sure how much value an executive that doesn’t have those competencies will be.”

Many executives are anxious that AI will replace their jobs and automated technology won’t be able to do tasks as well as humans, Sato said.

“There is fundamental distrust of the technology and what it’s going to do to people’s livelihoods,” she said.

There are also looming questions about how AI will be regulated. The General Data Protection Regulation in Europe and the Facebook-Cambridge Analytica debacle mean US data privacy regulation could be around the corner – and companies should put it high among their priorities.

“AI can create personal data,” Sato said. “You might give consent to share information A and B, but when those two things come together, they make information C that you didn’t consent to share.”

AI, however, gets smarter by consuming as much data as possible. Tech companies may now be gathering as much data as possible before potential regulation, Sato said.

“It’s against their interest to curb data collection,” she said. “They can’t help themselves.”

 


This article was originally posted at AdExchanger – https://adexchanger.com/research/constellation-research-ai-piques-marketers-interest-but-overall-adoption-is-slow/