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A tech firm that builds chatbots for big brands like Macy's and Alaska Airlines is acquiring a bot startup to corner the messaging market

Mar 15, 2019, 16:30 IST

Joshua March, founder and CEO of ConversocialConversocial

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  • Messaging firm Conversocial has acquired Acquire, a similar company that builds chatbots for brands.
  • Conversocial CEO Joshua March believes that the acquisition addresses marketers' concerns that chatbots are one-off experiences for consumers.
  • Facebook recently announced a move toward encrypted communication on its platforms, and one-to-one messaging could be a way for brands to stand out on the platform.

As more marketers experiment with messaging and chatbots, 10-year-old firm Conversocial is acquiring bot startup Assist.

Conversocial works with 250 brands including Macy's, Alaska Airlines, and Lowe's to power chatbots that handle customer service questions staffed by human reps. Assist also builds chatbots for clients such as 1-800-Flowers but uses machine learning and artificial intelligence to handle customer needs like tracking a package or checking the status of an order.

A few years ago, a slew of marketers built customer service chatbots on Facebook Messenger, Twitter, and WeChat. Since then, chatbots have lost some steam as brands have struggled to promote them on the platforms.

Joshua March, CEO of Conversocial, said such chatbots have failed because they can't respond to both quick and detailed queries from customers.

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"Messaging has this huge opportunity to combine bots and humans, which we think will allow businesses to start implementing automation in a meaningful way that they've struggled with over the past decade," he said.

Assist's 15 employees will join Conversocial, including CEO Shane Mac, who will become Conversocial's chief automation officer. March declined to disclose the price of the acquisition. Conversocial has raised $25 million in venture capital funding.

Facebook is betting big on messaging

Facebook is putting more emphasis on messaging, which March sees as an opportunity with the acquisition. Conversocial was among the first tech companies to get access to Facebook-owned WhatsApp for chatbots.

Mark Zuckerberg recently unveiled in a lengthy blog post that Facebook plans to shift away from public posts to private ephemeral communication in messaging apps.

Read more: Facebook's shift to ephemeral messaging raises big questions for its advertising business and could trigger a move into one-to-one marketing

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"The rise and bigger focus on encryption and ensuring that companies can take their customers' information will drive a lot more business engagement through messaging - it's one of the things that's been holding [brands] back," March said.

1-800-Flowers is a client of Assist and rolled chatbots on Facebook Messenger and Apple over the last three years.

1-800-Flowers' CMO Amit Shah said that measurement in messaging has a ways to go, but that the company has gotten better at understanding what people are looking for based on the tone of their queries. For example, someone who types "hi" tends to be looking to browse products, whereas people typing "hello" typically need help with an order.

"It's very early days," he said. "A year down the road I'll start asking ROI questions because I think the amount of learning that we are generating is substantial."

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