Anticipating Disruption with Conversational Advertising

8 min read
Mar 10, 2020
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Conversational advertising is upending traditional approaches to advertising. Print, radio, TV, and online advertising have all had their moments in the spotlight, but the interactions they produced were largely the same: a one-way impression forced on the viewer or listener. Digital advertising offers a greater degree of customization, but still, it often falls short in being meaningful to the intended consumer.

Especially when scaled up, traditional methods of advertising are very hit and miss. Are you reaching the audience that will buy your product, or everybody else? After all, nobody asks to be advertised to. This sort of question is what kept John Wanamaker's famous quote relevant for a long time: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”

“The times they are a-changin.” - Bob Dylan

Enter conversational advertising. Conversational advertising carries with it a promise of producing long-sought-after and purposeful two-way interactions with consumers. Using a combination of messaging, chatbots, artificial intelligence, natural language processing, and machine learning, conversational advertising provides the ability to make a personal connection with consumers at the very beginning of the sales funnel.

Conversational advertising is an automated conversation that leads to a desired action. These conversations take place by embedding a chatbot inside a display ad that is interactive. The potential customers who are viewing or interacting with the ad can then start a conversation at any time, creating a one-on-one customized interaction.

There is no need to pull potential customers to your website or app because they are already there. What’s more, with potential customers starting the interaction, advertisers can be assured that they are hitting their target audience. Combined with AI and messaging platforms, these interactions can be produced on a scale that rivals mass media approaches to advertising.

“We are made by history.” - Martin Luther King, Jr.

Chatbots, or conversational AI, isn’t a new concept. In fact, in 1966 the first chat(ter)bot was invented by Joseph Wiezenbaum. Named Eliza and produced with only 200 lines of code, it was meant to mimic a therapist. While extremely popular, the limited coding only allowed for very short conversations. Eliza made it obvious that people wanted to communicate with technology in the same fashion that they communicated with each other. However, the technology required for meaningful communication wasn’t available at the time.

Over the years, AI technology and machine learning advanced to the point that many businesses began using AI for chatbots to automate some aspects of customer service. Still, it has only been in the last few years that AI conversations have become sufficient enough to go beyond customer service and enter the arenas of advertising and marketing.

One reason for the increased push into conversational advertising is the sheer robustness of messaging. Over a three month period, people spent a total of 85 billion hours, or over 11 hours for every person on the planet, using messaging apps. Those apps are being used by over half of the people on the planet.

As far back as 2010, conversational advertising was projected to have exponential growth and become a $2 billion market within five years. That estimate was off, primarily because the technology wasn’t yet up to the task.

In 2016, some of the first forms of conversational advertising using AI were launched with Facebook, Twitter, and other social media platforms enabling developers to build a chatbot for businesses to automate conversations in their messaging platforms. These ads made it possible for customers to click on the ad and start a conversation via a conversation box. They could then ask questions and receive replies as if a human was communicating with them. The reaction by advertisers was immediate and overwhelmingly positive. Driven by AI, it was a better and faster way of communicating than phone calls or emails.  

Now, in 2019, you are able to choose the platform you would like to interact with your customers on. The big companies with a stake in the digital advertising industry have already made inroads into the conversational advertising space. Google AdLingo, IBM’s Watson, Twitter, Click to Messenger, WhatsApp, Instagram, iMessage, WeChat, and Quandoo are among the companies that have done so. With the current conversational ad model, many of the platforms allow you to design your own ad, and it is no longer necessary to send you a conversation box. Conversations can begin by simply interacting with the display ad.

“You had me at hello.” - Jerry Maguire

The benefits of conversational marketing are easy to see. The numbers alone are significant. In 2017, businesses and people exchanged two billion messages each and every month on Messenger. That number is now up to 20 billion messages a month. At the same time, businesses that allow their customers to message them are favored by over half of potential shoppers. Messaging is an intimate form of communication, especially on mobile, and with the ability to transition customers from a display ad to a conversation that they opted into, major conversion and positive UX opportunities await. 

Of course, there are more reasons than simple numbers that make a case for conversational advertising. By engaging with potential customers through a conversation that they initiated, customers are more active participants and have a better experience. This will lead to conversion rates increasing at the same pace as satisfaction levels. The conversation itself acts as a call to action.

Because these conversations can start at the beginning of the sales funnel, advertisers can stay with their customers from the first impression to the shopping cart. Conversations can be initiated over time with follow-ups and further calls to action. Additionally, they prepare customers for push notifications and drive long-term engagements.

Metrics can be tracked from the very beginning of the customer relationship. Rather than tracking a variety of debatable KPIs, metrics are simplified. Minutes of engagement, not enough to even evaluate with traditional advertising, are now relevant. With the instant response and instant feedback provided by conversational advertising, the true health of the relationship with customers can be measured. 

“A little less conversation, a little more action.” - Elvis

Although it is being used more widely in the ecommerce marketplace, conversational advertising has considerations to think about before wide-scale adoption takes place in your business. 

With the Internet of Things providing connections to a host of consumer devices, the potential and functionality of AI-powered conversational advertising will only improve. It’s already being deployed as voicebots by Amazon and Google, and it’s only a matter of time before it makes its appearance in a wide-ranging variety of other apps and devices. As with all advertising and marketing, the customer experience is the key factor in determining success. Adopt early, but do it right.