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Why Brands From Barbie to Uber Are So Hot on Chatbots

Are automated messaging platforms the new customer service reps?

"I think it's safe to say that this is the year of the bot," said CEO Beerud Sheth of messaging platform Gupshup. Getty Images

Richard Smullen says a painfully long wait for a Delta Air Lines customer service rep inspired him to join the world of artificial intelligence.

One night about a year ago, having grown tired of waiting for a phone operator to change his flight, he turned to the airline's mobile app—only to find he had to scroll through pages upon pages, unable to get what he needed. In the middle of a formal dinner at the time, he decided it would be faster just to message his sister and have her do it for him. It took her two minutes.

"I had kind of an epiphany moment, and this idea arose," he explained.

Smullen founded Pypestream, a 50-person firm that makes automated messaging services for companies around the world. Its mobile platform, which launched this past December, has already amassed 3,500 clients in 50 countries, ranging from utilities like Washington Gas to publishers like Billboard.

Pypestream joins a growing number of startups using automated messaging to help consumers do everything from hailing cabs to paying bills. Some say these services, known as chatbots, could be the biggest digital to-do since mobile apps. The bots are forms of artificial intelligence that create personalized one-to-one interactions.

"I think you're going to see a bot explosion," predicted Beerud Sheth, CEO of messaging platform Gupshup. "I think it's safe to say that this is the year of the bot. All the technology pieces are in place."

That explosion is expected to get even more fuel next week, as reports have Facebook setting to announce a bot store for Facebook Messenger at its F8 event.

The emergence of chatbots could have profound implications for brand interactions with their customers. Agencies say they're getting more inquiries from brands and more business pitches from platforms. Last month, iCrossing hosted an event featuring speakers from three chatbot startups—ReplyBuy, Arcade and msg.ai—and messaging platform Kik. Famous consumer brands like Barbie and Uber are also getting in the game.

"Everyone is watching the space right now, and that's great," Mike Roberts, head of messenger services at Kik, said. "Every major messenger is in [the chatbot space], and I can't remember the last time we've all made a bet together. It's only going to drive more interest."

But just as the bot chatter heats up, Microsoft is managing a meltdown. In the last two weeks, Tay—a bot designed to communicate like a millennial—spewed racist, misogynistic and anti-Semitic tweets and bragged about smoking pot in front of a policeman.

"Every time robots try to act like people it's usually a recipe for disaster," said Azher Ahmed, evp and director of digital operations at DDB Chicago.

Still, Ahmed and other agency executives say an oversaturated app market, the wide adoption of short-form communications like emojis and Internet slang, and the growing interest in AI make 2016 a perfect storm for bots.

"This is another wave of interactions that I think you have to be on top of," said Critical Mass chief strategy officer Grant Owens. "I think it will start to compete with the dot-com that you've put all your time and energy into. And if you're not ahead of that, you risk losing out to your competitors."

This story first appeared in the April 4 issue of Adweek magazine. Click here to subscribe.

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