• April 1, 2016
  • By Leonard Klie, Editor, CRM magazine and SmartCustomerService.com

Chat Apps Top Social Media for Consumers

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Messaging apps have recently surpassed social media sites as a communications channel, according to Business Insider Intelligence, a research service from the digital news publication Business Insider. The research suggests consumers are increasingly turning to messaging apps such as WhatsApp and WeChat to communicate with companies, browse merchandise, watch content, and make purchases.

And businesses are adopting them as well. Separate research from Aberdeen Group found that 45 percent of companies have already incorporated messaging into their support activities. These apps boast a number of distinct characteristics that also make their audiences particularly appealing to businesses and marketers. These include their size, retention, usage rates, and user demographics, says Will McKitterick, a senior research analyst at BI Intelligence.

The publication notes that the top four messaging apps—WhatsApp, WeChat, Facebook Messenger, and Viber—have a larger combined user base than the top four social networks—Facebook, Twitter, Instagram, and LinkedIn. The messaging apps combined have almost 3 billion users, while the social networks count 2.3 billion users. WhatsApp alone recently crossed the 1 billion user milestone.

It is important to note that Facebook owns two of the largest messaging apps. Facebook acquired WhatsApp in February 2014 for roughly $19 billion, and its own Facebook Messenger app counts about 850 million unique users.

Adding to their appeal for businesses, the large majority of messaging app users are young, an extremely important demographic for many companies.

Messaging apps have also proven to be better than social networks at user retention and engagement. These apps hold on to nearly six times more users than all other apps. Sixty-two percent of people who downloaded messaging apps were still using them 12 months later, compared to just 11 percent of users of other apps.

Messaging apps also get used more often, with users logging in an average of nine times a day; all other apps average about two launches per day. And messaging app users are engaged for more than a half hour per session.

"These apps are very sticky. Users enjoy them and tend to use them more," McKitterick says.

Part of their appeal, according to experts, stems from greater Internet availability and falling prices for data plans, lower costs for smartphones, and improved app features that include stickers, emojis, Voice over Internet Protocol (VoIP) services, gaming, and even payment services.

Another reason for their appeal comes down to the numbers as well. While social media is more of a broadcast channel to large audiences, messaging apps are much more private, intimate, and personal, offering a one-to-one experience, McKitterick explains.

"They can also be more attractive to brands," he adds. "It's not your typical form of advertising."

That appeal is only going to grow as more app providers build out and monetize their apps. WeChat, which is very popular in China, not only provides a messaging and file-sharing platform but also lets users hail cabs, order food delivery, buy movie tickets, play games, check in for flights, and bank online, directly through the app. The Line app in Japan and KakaoTalk in South Korea also offer extensive mobile commerce features.

In the United States, Facebook Messenger, Snapchat, and Kik are starting to follow WeChat’s lead in "m-commerce." Last year, for example, Facebook expanded Messenger as a business tool, letting retailers use the platform to send receipts and shipping updates, for example. Facebook is also said to be building payment capability into the app.

According to BI Intelligence, messaging apps can generate considerable revenue per user by facilitating purchases through a number of avenues, including in-app advertising. Nearly one-third of Kik users, for example, interacted with brands on the messaging platform last year through what the company calls opt-in advertising.

Still, for all of the appeal of messaging apps, marketers continue to invest more time and resources into social networks such as Facebook and Twitter than they do into messaging services. At some companies, social media accounts for 55 percent of their digital investments, according to BI Intelligence’s research. McKitterick expects that to change quickly.

This will happen fast once messaging app providers and CRM vendors more tightly integrate their systems, he states. "There's a disconnect right now in that [messaging] platforms grew outside of CRM, but the plan has always been to link them," McKitterick says. "We're still in the early days of these integrations, but they will all be worked out soon." 

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