KEY POINTS

  • Chatbot adoption has already taken off in the US. In the short time that chatbots have been available on messaging apps, they’ve already been used at least occasionally by 60% of US users between the ages of 18 and 55, according to exclusive BI Intelligence survey data.
  • Chatbots boast a number of distinct features that make them a perfect vehicle for brands to reach consumers. These include a global presence, high retention rates, and an ability to appeal to a younger demographic, which puts them in a particularly strong position.
  • Many platforms that enable businesses to deploy chatbots are still in the growth phase, and they have yet to properly define a set business model for generating chatbot revenue. Similarly, many brands that utilize chatbots are still investigating ways to effectively monetize them.
  • However, there are four existing strategies we think can be successfully tailored for chatbots. These models include Bots-as-a-Service, native content, affiliate marketing, and retail sales. The Bots-as-a-Service model will probably work best within the business-to-business (B2B) market, while the other models are likely to see the most success in the business-to-consumer (B2C) space.
  • Chatbots can also provide brands with value adds, or services that don't directly generate revenue. Bots used for research, lead generation, and customer service can cut down on companies' operational costs.
  • There are several benchmarks chatbots must reach, and barriers they must overcome, before becoming successful revenue generators. Consumers need to use the technology to build up a wide enough base to drive meaningful revenue, and metrics to measure bot effectiveness need to be developed and standardized.

Introduction

Improving artificial intelligence (AI) technology and the proliferation of messaging apps — which enable users and businesses to interact through a variety of mediums, including text, voice, image, video, and file sharing — are fueling the popularity of chatbots. These software programs use messaging as an interface through which to carry out various tasks, like checking the weather or scheduling a meeting. Bots are still nascent and monetization models have yet to be established for the tech, but there are a number of existing strategies — like "as-a-service" or affiliate marketing — that will likely prove successful for bots used as a tool within messaging apps.

Chatbots can also provide brands with value adds — services that don't directly generate revenue, but help increase the ability of brands and businesses to [...]