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Open for Business

We spoke to 34 product, marketing and CX leaders from the world’s most innovative companies about the state of conversational business in 2019. Here’s what we found.

Modern messaging has changed the way we communicate. It’s transformed how we keep in touch with friends and family, how we interact in the workplace, how we get our news, and how we wield language itself — think emojis, GIFs and Alexa commands. Yet despite ample evidence that consumers are ready to chat with brands, businesses have largely lacked the tools to message with customers in a personal, secure and scalable way. Until now.

In 2018, as they faced more public scrutiny than ever, many of the world’s biggest tech firms opened their messaging platforms to businesses. Meanwhile, relying on a potent combination of AI-powered automation and human-centric customer care, a new generation of conversational companies emerged in areas as diverse as healthcare, retail, media and politics. Together, these developments have produced a windfall of new opportunities for brands to engage and convert customers. They’ve also introduced a host of technical and operational challenges in an increasingly complex and competitive global economy.

In this report we speak to the people at the forefront of the conversational revolution — from the channel gatekeepers to the software vendors to the brand stewards and startup innovators. Along the way, we unpack the biggest industry stories of the past 12 months and look ahead to what 2019 may bring once the business messaging floodgates finally open.

Rob Lawson - Global Partnerships, Google

Rob Lawson

Global Partnerships, Google

Messaging is often the most convenient way to get things done with a business. As more businesses enable messaging, we expect consumer-to-business interaction to shift in a measurable way toward messaging, just as consumers have in their personal lives.

The Messaging Landscape at a Glance

Battle of the behemoths

Despite suffering a difficult year in the media spotlight, Facebook still dominates the messaging space, with WhatsApp hitting 1.5 billion accounts and Messenger following close behind. In China, Tencent-owned WeChat and QQ collectively claim more than 1.8 billion users.

Top messaging apps by number of users
battle of the messaging behemoths battle of the messaging behemoths

Source: Statista

Eva Taylor - Global Social Marketing, Hootsuite

Eva Taylor

Global Social Marketing, Hootsuite

Contacting a prospective or an existing customer by private message results in a far more intimate and authentic approach than publishing banner ads or updates on social media. In 2019 brands will need to decipher how to best participate in these conversations without being intrusive.

Think locally, chat globally

The global messaging space remains as fragmented as ever. WhatsApp and Facebook Messenger rule in the Americas, Africa, Australia and much of the Middle East, while competitors like Viber, WeChat, Line and Telegram maintain their strongholds in regions such as Russia, China, Japan and Iran.

Most popular messaging apps by country
battle of the messaging behemoths battle of the messaging behemoths

Source: www.similarweb.com

Across the enterprise

Why are people messaging with businesses? For many reasons, according to a Facebook survey. Messaging is becoming a key channel across every corner of the enterprise, from marketing to sales to CX.

Reasons consumers message with businesses
battle of the messaging behemoths battle of the messaging behemoths

Source: Facebook

Sarah Marion, Associate, iNovia

Sarah Marion

Associate, iNovia

In 2019, I expect the lines between marketing, sales and support to blur, as enterprises create cross-functional conversational experience teams.

A Year in Messaging 2018

1 January

WhatsApp launches its Business App in select markets, allowing restaurateurs, retailers and other small businesses to message customers from verified business accounts

2 February

At Mobile World Congress in Barcelona, Google and its partners showcase the first wave of brands using RCS to chat with customers, including Subway, 1-800-Flowers and Four Seasons.

3 March

Smartphone pioneer BlackBerry files a lawsuit against Facebook, claiming it owns the blueprints to modern messaging. Facebook will eventually countersue.

4 April

Apple beta-launches Business Chat, its highly-anticipated B2C messaging platform, with brands like Home Depot, Lowe’s and Marriott on board.

5 May

Google CEO Sundar Pichai sets off ethical alarm bells with Duplex, an AI-powered voice capability that can carry on phone conversations with unsuspecting humans.

6 June

After 20 years, Yahoo! Messenger shuts down, prompting a wave of nostalgia about the early days of instant messaging.

7 July

Google overhauls its Google My Business platform, allowing customers searching on mobile to start conversations with businesses much like how they would initiate a phone call.

8 August

The WhatsApp Business API launches in early access, enabling global brands to connect with users on the world’s most popular chat app using their enterprise systems.

9 September

The Wall Street Journal reports that workplace chat leader Slack, recently valued at $7 billion, is actively preparing for an early 2019 IPO.

10 October

The State of California passes a law requiring companies to disclose when they’re using a bot to communicate with people online.

11 November

Microsoft acquires bot developer XOXCO, the startup behind the popular Howdy chatbot on Slack.

12 December

Conversational startup SnapTravel, which curates hotel deals via messaging apps, closes its series A funding round at $21.2 million with an assist from NBA star Stephen Curry.

Pierre Lazarus, Global Chat Manager, Uber

Pierre Lazarus

Global Chat Manager, Uber

While SMS is still the pervasive channel to reach and interact with customers on a personal and immediate basis, it is still often under-leveraged. Given the opportunity here, I see companies finally really leaning into this channel.

The 9 Biggest Messaging Stories Heading into 2019

1 A New Front in the Messaging Wars

The Big Tech giants all made major business messaging plays in 2018.

Will Apple Business Chat succeed in bringing brands and iPhone users together via chat? Is Facebook’s WhatsApp Business API poised to be the enterprise messaging tipping point everyone is waiting for? Can Google rally telcos, brands and hardware makers around RCS, bringing SMS into the 21st century? And what about Google My Business messaging, with its built-in search advantage? All these new platforms will become widely available in 2019. What happens next will change everything.

Joshua March

Joshua March

Co-founder and CEO, Conversocial

The most important development has certainly been the release of WhatsApp enterprise accounts and Apple Business Chat. Not only are these both huge consumer messaging platforms that are now open for business, but they bring complete encryption and security (and in Apple's case, make payments significantly easier), opening up exciting new revenue opportunities for brands.

Joost Rijlaarsdam CEO Chatshipper

Joost Rijlaarsdam

CEO, Chatshipper

2019 will be the year we see conversions move from web forms to conversations.

Searching for early access

Looking at Google search trends, we can see a spike for Apple Business Chat when it launched its early access program in March, and another for WhatsApp Business API in August. Google itself gained attention in April when The Verge published an exclusive on Google’s integration of RCS in Chat on Android, and again in December when Verizon announced it would support the new text messaging standard.

Google search traffic for new business messaging channels
search interests in messaging platforms search interests in messaging platforms

Source: Google Trends

10B

messages are exchanged between people and businesses each month on Messenger alone

Facebook

Joe Gagnon

Joe Gagnon

CEO, Sparkcentral

It is surprising how slowly the Fortune 1000 market has adopted messaging for customer service. Surveys have been performed, consumers have spoken and the world wants to message for customer service. It is confounding as to why adoption has not kept pace with consumer preferences.

2 The Rise of Conversational Marketing

Led by fast-growing tech firms like Drift, Intercom and HubSpot, conversational marketing is becoming more than a buzzword.

Chatbot-fronted web messengers are trying to chase lead gen forms from websites, while Facebook’s click-to-message ads and AdLingo’s conversational display units are vying for a slice of the digital advertising pie. How will consumers feel when brands invade their sacred inboxes and start imploring them to “join the conversation”? Marketers are advised to tread carefully.

Dave Gerhardt VP Marketing Drift

Dave Gerhardt

VP Marketing, Drift

I think we're about to enter the hardest decade for marketers, but the best decade for brands. It’s going to get a lot harder to reach potential customers. The winners in 2019 and beyond will be those that figure out how.

Chuck Elias CEO Sciensio

Chuck Elias

CEO, Sciensio

Marketers will begin to understand (and operationalize) how chatbots' ability to deliver "just in time" information and personalized messaging enhances their relationship with customers. They will build a more loyal following and in turn, gain a deeper understanding of what each customer really needs and when they need it.

Brad Birnbaum, CEO and Founder, Kustomer

Brad Birnbaum

CEO and Founder, Kustomer

Proactive outreach is something all customer experience leaders should apply to their CX strategy in 2019. Being able to contact customers before they contact you with an issue is incredibly powerful and drives brand loyalty and repeat business.

3 Embracing Omnichannel

Customer experience has shifted from the responsibility of one department to a key brand differentiator.

As messaging apps join email, live chat, SMS and voice as key customer touchpoints, brands will need to maintain an omnichannel conversation with customers and share it across their marketing, sales, commerce and customer service platforms. Simply being where customers are just won’t cut it anymore. Customers expect brands to know who they are and personalize the experience accordingly.

Omnichannel CX stats
search interests in messaging platforms search interests in messaging platforms

Source: Ujet, TheDrum.com, MPL Systems, Salesforce, Facebook

Mikael Lemberg Director of Product Ecosystem Falcon.io

Mikael Lemberg

Director of Product Ecosystem, Falcon.io

Whether a consumer reaches out to you via email, Twitter, Facebook or WhatsApp, they will expect you to resolve their issue equally fast and with the same level of expertise.

Where contact centers invested in 2018

While contact centers are continuing to invest in their core services — phone and email support — live chat, social support and messaging are creeping up the agenda. But with only a minority of CX professionals surveyed ranking omnichannel as a top investment priority, there’s still a long way to go before businesses can rely on their software to deliver seamless customer journeys across ALL the channels.

Omnichannel CX investment priorities 2018
omnichannel investment priorities omnichannel investment priorities

Source: CCW Digital

Merijn te Booij, CMO, Genesys

Merijn te Booij

CMO, Genesys

I expect many advancements around the messaging domain, including new ways of forecasting and correlating volumes, and the rise of AI-at-the core routing technologies connecting messaging to other channels — and making it truly customer-centric.

Srikrishnan Ganesan, Director of Product, Freshworks

Srikrishnan Ganesan

Director of Product, Freshworks

Businesses want to have the best of both worlds — a product and experience designed for messaging, which also works seamlessly as part of a full-fledged helpdesk.

Szymon Klimczak, CMO, LiveChat

Szymon Klimczak

CMO, LiveChat

There are many examples of software services that enable businesses to create a kind of a hub for their all communication processes. Thanks to them, companies are capable of contacting their audiences in every sense of the word.

Sid Banerjee, Founder and Vice Chairman, Clarabridge

Sid Banerjee

Founder and Vice Chairman, Clarabridge

By extracting conversational intent, quality of interaction, agent knowledge and skill, companies will be able to performance manage agents, improve chatbot performance, make messaging platforms more responsive, and be more empathetic to customer needs and wants.

4 Born Conversational

Plenty of brands have jumped on the conversational commerce bandwagon but a new breed of startups have woven the concept into their DNA.

Threads sells designer clothes to wealthy millennials via WhatsApp, Instagram, iMessage, WeChat and Snapchat. Walmart’s Jetblack allows members to text “nearly any shopping request” and get it delivered the following day. Dirty Lemon’s cannabis-infused beverages can only be purchased via SMS, even in their self-serve popup stores. Call it brick-and-mortar meets ecommerce meets the honor bar. It may be a publicity stunt, but it also may be the future.

Hussein Fazal, Co-founder and CEO, SnapTravel

Hussein Fazal

Co-founder and CEO, SnapTravel

In 2019, we expect customers to start searching for brands over messaging first, before looking up their website for customer support.

40B

will be spent in the US through conversational commerce by 2022, accounting for 6 percent of total online spending

Mastercard

Jennifer Fleiss, Cofounder and CEO, Jetblack

Jennifer Fleiss

Cofounder and CEO, Jetblack

Consumers are constantly looking for ways to add efficiency in their lives and in 2019, we will continue to see the evolution of conversational commerce as a key tool that will enable this. We have to always challenge ourselves to create a conversational commerce experience that is not just tech for tech's sake, but meaningfully helps the consumer.

5 Voice of a Generation

Smart speaker sales continued to surge in 2018

With Amazon Echos, Google Homes and Apple’s Homepods becoming part of the furniture, questions have emerged about the impact voice technology is having on society. Sundar Pichai’s ill-fated Google Duplex demo set off an ethical debate that culminated in a California law requiring companies disclose when they’re using a bot to communicate with people online. There’s still work to do to make sure voice assistants don’t inherit our worst behaviours and biases.

Nitin Badjatia, Product Strategy, ServiceNow

Nitin Badjatia

Product Strategy, ServiceNow

Doc Searls famously said ‘All Markets are Conversations.’ We’ve gone through an era of radical digital transformation, and have lost some of the analog edge of why we connect with each other. Conversations are the currency of meaning – markets are more than the sum total of transactions – and the ability to connect conversations will become a critical differentiator for successful organizations.

Harin Vaghela, Conversation Platform Product Owner, LVMH

Harin Vaghela

Conversation Platform Product Owner, LVMH

Now that we’re firmly over the chatbot and NLU hype we think we’ll also see more value-led experimentation without the pressure of instant success which will hopefully lead to better user experiences. We would also hope to see NLU performance from the major providers even out across supported languages so that we can deliver consistent experiences across markets.

Erik Kalviainen, CEO, Meya.ai

Erik Kalviainen

CEO, Meya.ai

It's not about users chatting with bots, but about getting things done in a way that's dead simple for end users.

55%

of all U.S. households will own a smart speaker by 2022

Juniper

Phil Gordon, Founder and CEO, Chatbox

Phil Gordon

Founder and CEO, Chatbox

Voice-based interfaces are going to dominate the conversational interface advances in 2019. You're going to see a more hybrid blending of conversation and visual interfaces.

Mila D’Antonio, Principal Analyst, Ovum

Mila D’Antonio

Principal Analyst, Ovum

To work effectively, conversational AI should understand complex sentences of human speech in the same way humans do. I believe we will see developers focusing on improving aspects of the conversational process like intonation.

How are people using their voice assistants?

Most consumers are relying on voice assistants like Amazon’s Alexa, Apple’s Siri and Google Assistant to get the news, check the weather and play their favorite tunes. Only a minority are using them to buy stuff, suggesting voice-based conversational commerce is still in its infancy.

Top voice assistant use cases
battle of the messaging behemoths battle of the messaging behemoths

Source: Mediapost

Nancy Jamison, Principal Analyst, Frost & Sullivan

Nancy Jamison

Principal Analyst, Frost & Sullivan

The use of technologies such as machine learning, AI, natural language processing (NLU) and big data will enrich the intelligence we bring to applications and interactions. For example, the combination of AI and behavioral science can uncover insights into the behavioral and emotional aspects of agent customer interactions and be used in tools to improve interactions in real-time.

6 The Personal is Political

Messaging made international headlines in 2018 — and it wasn’t all positive.

WhatsApp was blamed for enabling the spread of deadly misinformation in India, while Iran declared Telegram a threat to the regime. In the wake of the #Metoo movement, bots like Spot and Loris emerged to address the scourge of workplace harassment and discrimination, while Jane’s Due Process helped Texas girls get access to sexual health services via an anonymous text hotline. In a difficult news year, it was nice to see messaging being used for good.

Michael Finneran, Principal, dBrn Associates

Michael Finneran

Principal, dBrn Associates

The truly successful will figure out how to work effectively around the evolving social norms regarding how and when people deem it appropriate to use text.

Eleanor Grano, Community Outreach and Youth Engagement, Jane’s Due Process

Eleanor Grano

Community Outreach and Youth Engagement, Jane’s Due Process

The reality is that most often teens text rather than call. It’s how they communicate with each other and it was essential they were able to communicate with us in the same way — securely, confidentially and at scale.

Ali Sadat, VP Product, Medallia

Ali Sadat

VP Product, Medallia

We saw messaging grow from a channel for one-way notifications and status updates into one that leverages personalized, two-way interactions that build relationships between brands and consumers. We also observed adoption of platforms like Slack and Workplace at a rapid clip, creating new ways to engage and understand employee experiences.

7 Content Gets Conversational

2018 was the year messaging apps surpassed social media as the place most people get their news, according to Reuters.

So it’s no surprise more publishers are experimenting with conversational experiences of their own. Quartz’s Messenger bot delivers the news as if you were chatting with a friend. The New York Times’ Angry Uncle bot coached Americans on how to interact with their relatives at Thanksgiving. Novelist James Patterson offered up his latest novel on Messenger, while celebrity-backed startup Hooked is trying to make “chat fiction” a thing. Expect more brands to jump on the conversational content bandwagon in 2019.

Tobias Goebel, Tobias Goebel, VP Product Marketing, Sparkcentral

Tobias Goebel

VP Product Marketing, Sparkcentral

I believe we’re going to see further “messagification” of apps across the board, above all Instagram.

Connor Cirillo, Conversational Marketing Manager, HubSpot

Connor Cirillo

Conversational Marketing Manager, HubSpot

I didn't think using conversational interfaces as distribution channels would catch on this fast. I'm both surprised that some spaces (like conversational content) moved so fast and how few brands know how to tap into this shift.

Lauren Kunze, CEO, Pandorabots

Lauren Kunze

CEO, Pandorabots

Entertainment and content oriented chatbots will continue to win with consumers, and hopefully be leveraged for use cases like education, healthcare, companionship, personal improvement, and others that positively impact people and society.

8 Chatbots Get the Job Done

Chatbots have escaped the hype cycle and emerged as useful tools to solve real-world problems across a variety of industries.

It seems like every major bank boasts a friendly bot, from Bank of America’s Erica, to HSBC’s Amy. But some of the most interesting contenders have been smaller names like Structurely, whose emotionally-intelligent chatbot helps real estate agents sell more homes, and ProNavigator, which is trying to make the process of buying insurance less painful. As bot-human handoffs get more sophisticated and chatbots gain access to the conversational record — giving them the context they need to respond intelligently — it won’t be long until customers begin asking, "Can I speak to your bot?"

Tsahi Levent-Levi, Founder, BlogGeek.me

Tsahi Levent-Levi

Founder, BlogGeek.me

2019 will move from chatbots as science fiction to chatbots as collecting data and assisting human agents.

25%

of communications surrounding shopping and financial services will be handled by chatbots by 2020

Gartner

Phil Gray, EVP Business Development, Interactions

Phil Gray

EVP Business Development, Interactions

The most surprising thing to happen in 2018 in the messaging/conversational tech space is the growing disconnect between consumers’ expectation of a conversation versus what today’s chatbots actually deliver.

There's a bot for that

Bot-driven customer experiences became a reality this year across a variety of industries. Telcos led the way, followed by financial services companies, travel brands and retailers.

How consumers are using chatbots
how consumers use chatbots battle of the messaging behemoths

Source: Worldpay

Where's my order?

One survey found that shipment tracking is the most popular chatbot function among consumers who like using chatbots for basic tasks that are easy to automate. Fifty-five percent like chatbots for customer service, while fewer than half of respondents said they prefer chatbots for making purchases.

Bot usage by industry
bot usage by industry battle of the messaging behemoths

Source: LIVEPERSON

$8B

in business expenses will be saved by chatbots by 2022

Gartner

Brian Donohue, Director of Product, Intercom

Brian Donohue

Director of Product, Intercom

Bots aren’t toys any more. Businesses are increasingly relying on them to get real work done.

9 Privacy, Please

While the GDPR forced nearly every business to rethink their data collection practices and disclose them to users, high-profile data breaches made consumers more privacy-conscious than ever.

As a result, end-to-end encryption became a key differentiator in the messaging space, with WhatsApp, Viber, Signal and Telegram leading the way. Japan’s Line and South Korea’s Kakao jumped on the blockchain bandwagon, launching their own cryptocurrencies, while upstarts Stealthy and Origin began building decentralized messaging apps that cut Big Tech out of the conversation altogether.

Yaron Gelberg, Business Solutions Director, Viber

Yaron Gelberg

Business Solutions Director, Viber

Social data and privacy concerns from 2018 will continue to be an issue in 2019. Brands will need to be more transparent about the data they are collecting and how they are using that information.

Lauren Kunze, CEO Pandorabots

Lauren Kunze

CEO, Pandorabots

I don't know if the US will adopt policies as stringent as GDPR, but I do expect to see more regulation around privacy and disclosure as it relates to automated conversational software and there may even be a reckoning coming around what consumer data big tech companies are allowed to collect and sell.

Data privacy stats
data privacy stats data privacy stats

Source: Ujet, TheDrum.com, MPL Systems, Salesforce, Facebook

The Conversation Continues

Reading through the reflections in this report reveals two overwhelming sentiments. The first is that industry insiders are bullish about messaging and its potential to deliver a more personal, convenient and consistent customer experience. The second is that many remain frustrated that the conversational future hasn’t come fast enough.

With customers eager to chat and the channels open for business, it’s now up to brands and software makers to turn all these predictions and possibilities into unforgettable experiences.

We can't wait to see what happens next.

- The Smooch Team

Harin Vaghela, Coversation Platform Product Owner, LVMH

Mike Gozzo

CTO, Smooch

In 2019, fuelled by an increase in the usage of digital channels, brands will begin to truly understand the individual journey each of their customers undertake. As these journeys are collected and shared within the enterprise, consumers can expect their interactions to be increasingly focused, personalized and delivered just-in-time.