The Instant Messaging Market - Statistical Data Included

American Demographics, Dec 1, 2001

How many interceptions has Donovan McNabb, star quarterback for the Philadelphia Eagles, thrown so far this year? When sports junkie Jeff Kingston, 24, wanted to know the answer, he skipped the Web and opted to use his America Online instant messenger (IM) program instead. Kingston opened the IM window and began corresponding with a "buddy" known as "TheSportingNews." In seconds, he learned that McNabb had thrown only three interceptions. An accurate answer to the question, but one that didn't come from his sports-obsessed friends. Instead, it came from a robot.

Kingston is one of 60 million Americans - about half of all Americans online - who use IM services provided by industry leaders AOL, MSN and Yahoo! or other smaller players. Kingston, who works in the front office of the San Diego Padres, has been using IM since college, and now relies on it to keep in touch with friends. "IM is a great place for us to come together," he says. Recently, a new member entered Kingston's conversations: a robot automated by software and an underlying database that can answer football questions on demand, acting much like a human sports savant.

Conventially known as a "buddy bot," "TheSportingNews" is the invention of ActiveBuddy, a New York City-based company that's trying to find commercial uses for IM services. So far, buddy bots are emerging as the most promising and least intrusive way marketers have found to tap in to the widely popular IM world, which despite its large user base, has yet to succeed as a viable advertising medium. These bots have been used to raise awareness of certain brands or products: They have promoted albums and movies, acted as customer service reps and offered sponsored services such as interactive databases. "Bots are the most interesting thing going on, commercially, in the Instant Messaging world," says Marissa Gluck, advertising analyst at Jupiter Media Metrix.

Two companies, ActiveBuddy and Foster City, Calif.-based FaceTime, are the biggest players in this new field of IM-based consumer communication. Their innovative use of "bots" is helping these companies receive wide attention in the IM marketing world. ActiveBuddy first released a bot to the public last April, called GooglyMinotaur, a funny name perhaps, but one that resonated with teenage fans of the band Radiohead because it's their animal mascot. Fans could type "GooglyMinotaur" into an AOL, Yahoo! or Microsoft IM buddy list and then get information about concert tickets, song samples and band member trivia - or even play Radiohead hangman.

Capitol Records hired ActiveBuddy to develop a robot to create advance buzz for the band's newest album, "Amnesiac," which was released in June. Peter Levitan, ActiveBuddy's CEO, says he doesn't know how many album sales can be attributed to GooglyMinotaur because direct sales conversion is difficult when "only 1 percent of all record sales take place online." However, according to ActiveBuddy spokesperson Emily Lenzner, GooglyMinotaur received 10.5 million messages from an undisclosed number of users during its first seven weeks of existence.

Despite the lack of sales creation data, another record company, Warner Brothers, has followed suit by commissioning "LindsayBuddy," to promote the debut album of singer Lindsay Pagano. "Instant messaging is the fastest growing segment of the Internet, and we want to offer Lindsay content to her demographic, which has a very high user rate of instant messaging," says Robin Bechtel, head of new media at Warner Brothers Records.

More recently, ActiveBuddy has developed an all-purpose IM buddy called "SmarterChild" that runs on AOL and does not limit itself to spitting out specific information related to one artist. SmarterChild users can get local weather, movie times, headlines, stock quotes and horoscopes. It's much like an Internet portal, in the way that it connects a user with desired information. (See screen shot, page 30.) But it can also be tailored to specific promotions and be used to create brand awareness. Sprint, for example, ran a baseball pennant race promotion that included a buddy bot called "AgentBaseball," which, like TheSportingNews, provided player stats and other trivia. If IM users like a particular bot, they can direct their friends to it with a quick "add this buddy to your list" message.

FaceTime, the other bot company, has been playing the IM space a little bit differently, though many of the guiding principles are the same. Instead of engineering fully automated buddies that sit waiting for an inquisitive IM user, FaceTime builds customer service bots. These connect the user with a customer service representative - one who is often able to handle multiple conversations at the same time and thereby speed up what would have been a slow phone queue. The company has built such bots for Chicago-based Bank One and Lincoln, R.I.-based Amica Insurance. Craig Phelps, who oversaw the rollout of a customer service bot for Amica's 500,000 policy-holders says the bot "works for those who want to get questions answered quickly." FaceTime CEO Glen Vondrick sees this trend turning into a common commercial use of the medium. Customers in any industry could bounce questions off these bots, receive alerts about shipping, monitor inventory and order products.