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Paradigm Shift – An overview of Artificial Intelligence and Chatbots

The Landscape

So, what exactly is a Chatbot?

A chatbot is a digitally created service that can hold natural sounding conversations with human beings with the aim of accomplishing particular tasks, such as answering questions or enabling product purchases. Powered by a set of simple rules and varying degrees of artificial intelligence, these bots converse with real people via messaging apps such as Facebook Messenger, Kik, WeChat and Telegram.

And those conversations—and the platforms which support them—are now key for consumers. Not so long ago, mobile applications and social media presence were the must-have capabilities for any forward-looking brand. But texting has continued to be a staple of mobile communication. And now consumers, and younger age groups in particular, are rapidly switching their attention to messaging platforms.

It may seem hard to believe, but we were already talking about the idea behind a chatbot in the 1950s, when scientist Alan Turing started exploring the chatbot idea. But today we’ve actually been able to combine the technology and artificial intelligence to create effective chatbots that people want to use.

Early versions of the chatbot were powered by certain keywords and logic that drove a constructed (and rigid), response matrix, meaning that if someone didn’t ask a question featuring one of these specific “trigger words,” the bot was unable to respond to the person. However, advances in machine learning have made chatbots better listeners, and far more accurate. Now chatbots can learn conversational and written cues to know what someone is trying to ask when spoken or written in a variety of ways. A consumer can ask a chatbot the same question in a variety of ways and the chatbot will understand what they’re trying to say.

This means that after decades of waiting in the wings, chatbots are finally ready to hit the mainstream. The technology is in place for brands to provide a cost-effective solution that customers and brands actually want to use, and the mobile technology of modern society is so engrained in customers that chatbots are the next logical step. In most cases, it isn’t a hard sell to get customers to use chatbots — it’s simply about making sure the technology and interface is there to make it an effective and engaging experience.

A Paradigm Shift

“Over 2.5 billion people have at least one messaging app installed. Within a couple of years that will reach 3.6 billion, about half of humanity.”

* The Economist

The chatbot evolution was on rise in 2016, but it really took flight through 2017. Almost every morning there was news of new ways of utilizing chatbots in real life scenarios.

The key to the chatbot is that it can hold natural sounding conversations with human beings with the aim of accomplishing particular tasks, such as answering questions or enabling product purchases.

Powered by a set of simple rules and varying degrees of AI, these bots converse with real people via messaging apps such as Facebook Messenger and WhatsApp.

And those conversations – and the platforms which support them – are now key for consumers. Not so long ago mobile applications and social media presence were the must-have capabilities for any forward-looking brand.

But texting has continued to be a staple of mobile communication. And now consumers, and younger age groups in particular, are rapidly switching their attention to messaging platforms.

Messaging apps now have the largest numbers of active users, having overtaken social media apps in 2015. For example, Facebook Messenger has over one billion strong user base (worldwide, over 50 million people spend an average 50 minutes a day on messenger apps). Able to exploit the network effects of their platforms, these apps have far better retention, too: 12 months after download, they show a retention rate almost six times higher than the average for apps.

“Messaging is one of the few things that people do more than social networking.”

* Mark Zuckerburg, Facebook CEO

The Bots are Here to Stay.

Users feel more at ease to text rather than calling or emailing.

With 1.4 billion users in Facebook Messenger, the pattern of digital communication has changed.

This rising trend shows that people prefer to send messages to businesses or organizations over their Facebook Page rather than sending formal emails as they may have had over the last decade.

In the 2017 US wide Chatbot Survey, 97% of businesses surveyed believed that the chatbot was here to stay and it was a necessity for their business to try and understand and harness the technology.

Adoption Across Industries.

This new platform has led a profound change in the way businesses are connecting to their customers. As a matter of fact, customer care is the segment which has been most focused by chatbots.

Aside from customer care, chatbots are also adding value to other business segments such as sales funneling, lead nurturing, helping brands to showcase products or services, receiving and processing payments, reminders of key events and so on and so forth.

Based on case studies, it is expected that the e-commerce, retail, healthcare, insurance and hospitality industries will see the majority of adoption and benefit of the chatbot solution across 2018 and 2019.

Mass Adoption – at Scale

One of the reasons the chatbot has so much potential for businesses is its ability to scale. In 2016, 1.6 billion people used mobile messaging apps. That number is expected to reach 2 billion people, or 80% of all global smartphone users, in 2018.

“Contextual communication is what will make chatbots the revolutionary technology everyone is promising.”

* Joe Toscano, Experience Designer — Google

The rise in popularity of messaging platforms has seen the birth of a new user centric design called Conversational Design

2018, we believe, due to this adoption and expansion of AI technology, will drive the same level paradigm shift in the website design and interface world, as it is currently doing in the messaging and social world today.

This year will see a marked increase in the adoption of AI and Chatbots for brands across South Africa and the world. Facebook Messenger currently boasts over 150,000 bots active on the platform – a number we expect to at least triple in 2018.

This revolution will change the way end users expect to be interacted with on all digital platforms. It will drive a fundamental behavioral shift in the way end users want to interact with websites, and in how they want to consume that site’s content.

Think of the death of the DVD as an example. As soon as streaming and the ability to download movies and content became mainstream; people stopped hiring and buying DVDs. Why? As products, the DVD and the DVD player still work. The change occurred because the end user changed their behavior in how they wanted to consume video content; and in how they wanted to be entertained and how they wanted to now access and store that entertainment.

As a result of this global behavioral shift, those who didn’t innovate, went out of business.

Why should your business embrace this new technology?

Being an early adopter of this exciting new platform and its capabilities, can offer a number of key benefits to your business:

1. You’ll get great (and most likely), free PR

Brands like EBay, Sephora, and KLM have received multiple awards and rave reviews from their investment of conversational designs and AI systems across various social platforms. Your brand could also benefit from being one of the first in your market to employ the technology.

2. The market, for now, isn’t very competitive.

As with any new channel, the opportunity to make an impact and to achieve significant engagement from your end user is phenomenal.

3. More data will drive your communication strategy – and it can be hyper-personalised as a result

As your users engage with your chatbot, it records their interaction, their decision-making processes and this allows your AI to build a specific user profile of each user; segmenting the database for you and allowing your brand to develop extremely personalised communications to be specifically relevant to each user.

We’d love to help! About Iconic Media:

Iconic Media is an agency with a difference.

We’re not digital. We’re not ‘above-the-line’. We don’t believe in the line.

We believe that digital communications and marketing should be about understanding your business problems, and finding the best online and creative solutions that solve those problems.

We’re not just about making campaigns that make a difference today and are forgotten tomorrow. We’re about finding the answers to your questions that will make a difference to your business. We combine creativity, strategy and technological expertise to drive results.

Our Code team have been working at the cutting edge of AI and chatbot development for the past three years and have been instrumental in assisting brands and agencies in developing these solutions across South Africa, Australia and the UK.

Animation, Code, Drip, Media


Dermot Latimer

Dermot Latimer

Dermot Latimer is the Founder and CEO of Iconic Media. Having founded the agency upon his arrival in South Africa 4 years ago; he has been consulting to large and small brands in the digital, technological, experiential, and content fields for that time.

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Iconic Collective

We are 7 agencies with one voice, operating as a collective of creative businesses. Our expertise encompasses shopper marketing, UX, development and technology, design, experiential, print, digital, creative production, and post-production.