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Answering the call to greater engagement (and revenues): WhatsApp, WeChat and chatbots

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’39 Steps’ to more revenues

Not that we like to dwell on “I told you so” situations, but Zeitgeist has been rambling on about the missed opportunities of WhatsApp – relative to its Asian counterparts like Line and WeChat – for at least a year now. The platform, owned by Facebook, has had a real opportunity to borrow a page from its analogous peers in the East, particularly with regard to B2C opportunities, for some time now. It was hugely gratifying therefore when last week it was announced that WhatsApp will allow businesses to send messages to users of the platform.

Whatappening in business

The Financial Times suggests example messages along the lines of “fraud alerts from banks and updates from airlines on delayed flights”. It’s about random companies sending you somewhat-tailored messages. Snore. The potential here is so much more monumental. Think of the potential for a fast-food service, or a news publisher (we said think; we’re not going to do all your work for you). What the platform won’t do is start serving banner ads in the app. Firstly because Facebook surely acknowledge what a horrendous impact this would have on UX; secondly because WhatsApp strongly pushes their e2e encryption feature.

Interestingly, the way this will work is that Facebook will get access to your phone number (if you haven’t succumbed to their pleas asking for it already). It will formalise the link between your old-school Facebook account and your not so-old-school-but-not-quite-Snapchat-either WhatsApp account, as suggested by New York magazine. Apparently Facebook will also be able to offer you friend suggestions. Whew, yeah because that’s a tool I really am concerned about and wish was more useful and efficient.

The potential we referred to earlier (we’re still not going to do all your work for you) is around chatbots. Chatbots and this new era for WhatsApp surely make sense. And people are clamouring for them. According to eMarketer’s data from May, nearly 50% of UK internet users say they would use a chatbot to obtain quick emergency answers if the option were available. About 4 in 10 also said they would use a chatbot to forward a question or request to an appropriate human.

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Whatsappening in the rest of the world

But to say WhatsApp has been missing the boat in terms of additional data insight or revenue streams outside Western markets is a touch unfair. As the FT detailed at the beginning of the month,

“Whether you are in the market for a nicely fattened goat from the United Arab Emirates or freshly caught fish in the port of Mangalore in India, you can place your order on WhatsApp”

Indeed, it seems though outside Western markets the app is used in an entirely different way. Even within Europe there are differences. In Spain it is extremely common to make and receive calls over WhatsApp. In the UK, many a caller has been befuddled by my attempts to reach them via the platform. The likes of WhatsApp though are particularly crucial in emerging markets like India, where many citizens have never registered for and may never now register for an email address. If this sounds ludicrous, it means you’re old. It’s why the aforementioned pleas from Facebook for your phone number, why Twitter occasionally does screen takeovers when you open the app asking for it, and why in a recent project engagement I managed, we recommended a major international film and TV broadcasting company that they do the same for their own login feature. The data below for emerging markets shows the astounding reach WhatsApp has managed (and the foresight in its purchase by Zuck):

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While Benedict Evans of Andreessen Horowitz says the platform has struggled to acquire new customers for businesses versus Facebook and Instagram, it undoubtedly has been successful in strengthening relationships with existing customers. This is fine in Zeitgeist’s eyes. Retention is cheaper than acquisition; if you create a good CX you don’t need to worry about getting new customers. The emphasis should be on engendering loyalty, not on scrambling to reach the newbies all the time.

WeChat’s inimitable template

At the start of the piece we mentioned China’s WeChat (or Weixin) messaging platform, of which Zeitgeist is a big fan. Others are too, which is why by some estimates it’s worth $80bn. One of the advantages inherent in both WeChat and WhatsApp is that users have naturally gravitated to these applications without the need for them to be incentivised or “walled garden”ed into such interaction. And such engagement doesn’t start before you’re old enough to even lift a mobile device, again, you’re too old. As The Economist detailed in a piece earlier this month,

“[Four year-old Yu Hui] uses a Mon Mon, an internet-connected device that links through the cloud to the WeChat app. The cuddly critter’s rotund belly disguises a microphone, which Yu Hui uses to send rambling updates and songs to her parents; it lights up when she gets an incoming message back”

For the child’s mother, WeChat has replaced such antiquated features as a voice plan, as well as email. The application also integrates features for business use that mimic that of Slack in the US. According to the article she even uses QR codes to scan business associate profiles more than she uses business cards. QR came a little late to Western markets and despite the intentions of agencies like Ogilvy in the 2010s, has failed to take off. Its owner, Tencent, has used its powerful brand and powerful authentication convince millions to part with their credit card details. The likes of Snapchat and WhatsApp have yet to make the convincing case for this. It is this crucial element that allows the father of said family to use the app for eCommerce, contactless payments in store, utility bills, splitting the bill at restaurants, paying for taxis, paying for food delivery, theatre tickets and hospital appointments, all within the WeChat ecosystem. It is then no surprise that a typical user interacts with the app at least ten times a day.

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Although we mentioned no incentivisation has been necessary, a state-backed campaign last Chinese New Year saw a competition for millions of dollars in return for people vigorously shaking their handset during a TV show, the way to both have the app interact with a TV programme as well as the way for users to make new friends who are also users, according to The Economist, which reported that “punters did so 11 billion times during the show, with 810m shakes a minute recorded at one point”.

McKinsey reported last year that 15% of WeChat users have made a purchase through the platform; data from the same consulting firm this year shows that figure has now more than doubled, to 31%. Can such figures be replicated in the West? Time and culture have led to WeChat’s pervasive effectiveness and dominance. Just like QR codes have never taken off in the West, so SMS and email never took off in China, so there was never a competing platform to ween people off when it came to messaging. What some people had used was Tencent’s messaging platform QQ, the successor of which became WeChat. QQ contacts were easily transferable. Gift-giving idiosyncracies, leveraged and promoted with a big marketing push, as well as online games (from where over half of revenues derive) are both still nascent behaviours and territories for consumers and platforms, respectively, in the West.

Next steps

It’s fascinating of course that none of these apps for a moment consider charging for voice calls; that would anachronistic and simply bizarre. With WhatsApp’s latest announcement, it takes a step in the right direction, opening up additional revenue streams while also trying to develop a more cohesive ecosystem for its user base. Whether users in Western markets will be comfortable with a consolidation of features on one platform – owned by a company that is viewed by some as already having consolidated too much data on them – is an open question, and surely the first hurdle to begin tackling.

UPDATE (30/9/16): While messaging platforms are great, there are other opportunities to consider too. Shazam, the app that was a godsend for Zeitgeist while at university wanting to know what song was playing in the club, has been around for a while. It’s impressive then that is has managed to double its user base in the past two years, continuing its expansion into TV content. Product placement in the US has helped, and Coca-Cola worked with them on a big campaign last year. The company is breaking even for the time since 2011. An interesting platform to consider, for the right partner…

 

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They think it’s all over. It never even started.

December 3, 2010 2 comments

The lessons marketers can learn from Englands World Cup bid.

One of the things Zeitgeist likes to do when not identifying first class insights is finding inspiration in the real world that can be brought into the world of marketing.

Sometimes it is as simple as this deconstruction of the Rolling Stones Gimme Shelter that demonstrates how a fantastic creative execution is made during the fusion and collaboration of individual genius contributing their own part to the mix.

However over the past week one half of Zeitgeist has been lucky enough to be given an insight of their own into the pitch process.

Last week I was lucky enough to attend the excellent APG Battle of Big Thinking which pitted planners from around the industry against each other as they debated their big thoughts.

In the semi-informal atmosphere of the architecturally interesting British Library the style and charisma of the presenters was often more influential that their actual idea.

Trapped by the snow and a lack of faith in the UK rail infrastructure, Zeitgeist was able to watch the doomed English bid for the FIFA 2018 World Cup from the comfort of the sofa.

It is rare to be able to watch another team pitch and in the much more serious arena of the Messe Zurich it provided a few more lessons that we can bring into our own business.

Lesson One
The most important of which is to understand the criteria against which you will be judged. This isn’t always as simple as looking at the brief. You have to understand what your audience really want and why you are there.

England received a glowing report for infrastructure and facilities and a 100% rating by McKinsey. They were even acknowledged as being the only bidders who could ‘hold the World Cup tomorrow‘.

However a quick look at previous World Cup hosts suggests that much of that is irrelevant and what FIFA want is to enter new markets and leave a legacy.

Up to 1990 the World Cup was alternatively hosted between South and Central America and Europe. In the 90’s with the break up of the Eastern Bloc and growth of technology like the internet and mass broadcasting the world and the world of football changed dramatically.

By the time those changes began to take effect the 1994 and 1998 World Cups had already been awarded to USA and France respectively.

Then in 1996, FIFA awarded the 2002 World Cup to Japan and South Korea for what was the first Asian World Cup.

The 2006 World Cup went to Germany but was supposed to go to South Africa. The influence of Kaiser Franz Beckenbauer and other shenanigans saw to that.

In 2010 the World Cup was indeed held in South Africa breaking a new frontier.

In 2014 it will be held in Brazil, the nation that puts the ‘B’ into ‘BRIC’. They haven’t hosted it since 1950 and it will be the first time the event has been hosted in South America since Argentina invited the world to sample the delights of a military dictatorship in 1978.

So with this knowledge at hand the question arises as to whether England really thought they stood a chance of winning the 2018 bid. All the attributes that would have made them a stand out candidate as hosts before 2000 now count against them. The irony is that before then, the Taylor Report had only just forced clubs to upgrade their dilapidated facilities so they wouldn’t have been ideal candidates for earlier World Cups either.

The pitch itself was excellent.

If FIFA president Sepp Blatter was a balloon he’d have popped as he introduced the future King, current Prime Minister and icon David Beckham to plead with him and his mates for the right to host the World Cup.

Opened by the excellent Eddy Afekafe the presentation answered exactly what England would have wanted to see if they were choosing the venue.

Unfortunately FIFA’s criteria was different and that’s why the bid failed.

So what other lessons can we learn that will help us when we pitch to prospective clients?

Lesson Two
It doesn’t matter how well you present if you don’t tick their requirements.

Lesson Three
It doesn’t matter who pitches if you don’t meet their requirements.

Lesson Four
It doesn’t matter how in love you are with your own solution if it doesn’t meet their requirements.

For all the claims of corruption and a stitch up, England were fighting a losing battle from the beginning. In any case, the idea that good Olde English values of fair play would somehow infect an international cabal of sports administrators when national and personal fortunes are waiting to be made does seem naive to say the least.

With the newly branded St George’s Park finally getting the go-ahead after years of delay it looks as though we might finally be investing in training a team of World Cup winners rather than trying to get home advantage. Maybe our efforts should have been spent getting it finished sooner instead of chasing impossible dreams.

And that’s the fifth and final lesson for agencies. Next time you get the chance to pitch, stop and think about whether you actually really stand a chance.

Does this company always appoint local or global agencies? Is the pitch just an excuse to justify giving it to the incumbant? What is your role in the process? Are they just after some new ideas? Who is actually making the decision?

Be brutally honest. If you don’t think you stand a chance, work out how much you would have wasted pitching and instead invest it in developing your own staff and boosting their morale. They already believe in you and will service your existing accounts all the better for it.