Facebook Doubles Down On Messaging With Messenger Bots

Facebook released a Chat SDK to a limited group of developers allowing them to build official bots on Messenger. When users message these ‘official accounts’, bots can immediately reply with further product information, pricing, location, buy buttons etc. Although currently available only to a testing sample of developers, if rolled out fully, it will play a crucial role in extending Facebook’s mobile ecosystem.

Integrating third party bots into messaging services is not a new move per say. It has been implemented by the likes of Line or WeChat in the past; Wall Street Journal reported in December that Google commenced work on a mobile messaging service with chat bots as a key feature and Facebook itself has tested the waters with its Uber partnership. What’s significant about this move coming from Facebook is the sheer size of its audience in the messaging app environment and thus the value it can offer to integrated third parties. Messenger alone boasts 700 million Monthly Active Users (MAU). Its growth of net new MAUs between January and September 2015 comfortably outgrew that of WeChat and Line combined. And that’s without even mentioning Facebook’s largest mobile messaging behemoth - WhatsApp with 935 million MAUs.¹

The timing is perfect for Facebook. Thanks to its size, ‘allowing’ third parties to integrate bots into Messenger can be marketed as a lucrative proposition. Not only will retailers get closer to their addressable mobile audience, but eventually won’t have to bear the costs of developing and maintaining expensive standalone apps or deal with the struggle of convincing users to visit those apps at the cost of switching off Facebook or Instagram.

As attractive as it may sound, retailers won’t actually have much choice but to adopt this proposition in the future, due to the tech giants’ dominant app usage time share. Although time spent in apps is increasing, the number of apps which consumers regularly use has hardly changed since 2012. But the number of available apps will keep growing at an average annual rate of 9.8% between 2015 and 2020.² Thus for retailers and services who are trying to establish presence in the mobile app environment, it is becoming increasingly harder to compete for usage time with their isolated apps. In other words, Facebook has captured enough mobile messaging users to now say to retailers and services: ‘If you are looking to sell in the most popular part of the mobile messaging ecosystem, we are it.’

Despite this ‘environmental lock’ proposed by Facebook, this can be deemed a win-win situation for both Facebook and its third party partners. Facebook gets to carry on with its mission of becoming the dominant mobile portal of the 21st century via further decreasing the usage time-share of competing apps by simply including them in its world. On the other side, third party businesses will benefit from unlocking new audiences and an improved user experience.

One final aspect to note is how Messenger chat bots help the expansion of Facebook’s core use case, from social connectivity and entertainment to necessity/utility usage (e.g. daily errands, shopping etc.). It is a crucially important environment Facebook has yet to dominate and projects like Facebook M and The Chat Bot SDK definitely help kick things off.

Wildcard: Bot Directory Curation Could Be The Future Of Facebook M

Although the Chat SDK release might seem counter intuitive as it potentially competes with Facebook M, the two could actually end up working in symbiosis rather than against each other. The rise of mobile concierge services like Siri, Google Now, Cortana, or Facebook M illustrates just how important this environment is for tech giants to conquer. Letting in third party bots mitigates the need to worry about creating a mobile concierge service that can handle ‘everything’ perfectly. Instead it embraces a divide and conquer approach letting third parties populate the environment with their own specified concierges, at their own cost. If the catalogue of ‘Messenger Bot Services’ gains significant size, Facebook M could act as a ‘discovery operator’ connecting users to relevant sub-directories of services, which users request on the go. Facebook M is the only major mobile concierge powered by living humans, which could help create an advantage in their product and service curation abilities over competitors purely powered by AI.

With Google trying to make its mark with a chat bot infused messaging service too, the battle for commercial messaging on mobile continues. Google currently lags behind Facebook’s messaging user base significantly, but must do everything in its power to capture at least a part of this space. The stakes are high: Increased time spent within the giants’ respective mobile ecosystems; unlocking swarms of new consumer data; laying the path for new revenue streams in the future; providing additional value to advertisers and ultimately, winning or loosing part of their wallet share.

¹A detailed analysis including 12 key mobile messaging platforms can be found in the MIDiA Research Mobile Messaging Platforms Report.

²For More on this refer to the MIDiA Mobile App Economy Forecast 2015-2020