Line adds an artificial intelligence concierge to attract advertisers

Line, the Japanese communication app, has developed an artificial intelligence (AI) concierge service, similar to the Messenger M system on Facebook. The company hopes the chat app will compete with the likes of Facebook's M and China's WeChat service by providing an augmented chat bot that responds intelligently to user requests. If the interaction becomes too complex for the chat bot, a human operative will take over instead. The main issue for Line is expanding its messaging app service to rival established chat apps, although companies such as Facebook have a distinct advantage with their vast social networks that they can utilise to obtain and share user data with publishers. Line is looking to attract users and advertisers to its new platform by means of its AI chat bots.

Takeshi Idezawa, chief executive officer of LINE Corp, speaks during a media briefing titled "Line Conference Tokyo 2016" in Urayasu, east of Tokyo, Japan, March 24, 2016. REUTERS/Yuya Shino

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Japanese chat app Line is set to launch an artificial intelligence concierge service, similar to Facebook Messenger’s M, according to Financial Times.

The new service will use AI processes to augment chat bots so they can better respond to user requests. When the interaction with a user becomes too complex for the AI, a human will step in to complete the transaction. The release comes just after the company announced that it will be running pilot studies after opening its bot store API to 10,000 developers.

Line is attempting to position itself as a challenger to Facebook and WeChat, the leading chat app in China. The chat app, owned by Naver, has been testing out the feasibility of bots to enable its users to complete tasks other than messaging, including hailing cabs, booking appointments, and B2C communication.

Building out its messaging app services is imperative if Line wants to compete with larger chat apps. However, the company is at a disadvantage compared to Facebook's messaging app. Messenger can leverage Facebook's massive social network to collect and share user data with advertisers. Line is hoping the introduction of bots will help make up for this deficiency by drawing more customers and advertisers to its platform.

Thus far, Line has managed to build a successful business around the sale of stickers, advertising, and other services. In 2015 the company grew its annual revenue 40% YoY from 2014, reaching $1.1 billion.

However, the company's limited user base may hinder its global expansion efforts.Although the company has been extremely successful in Japan, the local and cultural qualities of its services mean that it hasn’t been able to expand beyond its core market. Two-thirds of Line’s user base lives in Japan, Taiwan, Thailand, and Indonesia. The company now stands at around 215 million monthly active users (MAU). Comparatively, WeChat reports more than 700 million MAU, and Messenger has more than 900 million.

Messaging apps have evolved beyond serving as simple tools to communicate with family and friends through text. Now we can share pictures, videos, and even make transactions all from within these applications. And that's just the beginning.

Will McKitterick, senior research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on messaging apps that takes a close look at the size of the messaging app market, how these apps are changing, and the types of opportunities for monetization that have emerged from the growing audience that uses messaging services daily.

BI Intelligence

Here are some of the key takeaways from the report:

Mobile messaging apps are massive. The largest services have hundreds of millions of monthly active users (MAU). Falling data prices, cheaper devices, and improved features are helping propel their growth.

Messaging apps are about more than messaging. The first stage of the chat app revolution was focused on growth. In the next phase, companies will focus on building out services and monetizing chat apps’ massive user base.

Popular Asian messaging apps like WeChat, KakaoTalk, and LINE have taken the lead in finding innovative ways to keep users engaged. They’ve also built successful strategies for monetizing their services.

Media companies, and marketers are still investing more time and resources into social networks like Facebook and Twitter than they are into messaging services. That will change as messaging companies build out their services and provide more avenues for connecting brands, publishers, and advertisers with users.

In full, this report:

Gives a high-level overview of the messaging market in the US by comparing total monthly active users for the top chat apps.

Examines the user behavior of chat app users, specifically what makes them so attractive to brands, publishers, and advertisers.

Identifies what distinguishes chat apps in the West from their counterparts in the East.

Discusses the potentially lucrative avenues companies are pursuing to monetize their services.

Offers key insights and implications for marketers as they consider interacting with users through these new platforms.

To get your copy of this invaluable guide, choose one of these options:

START A MEMBERSHIP Subscribe to an ALL-ACCESS Membership with BI Intelligence and gain immediate access to this report AND over 100 other expertly researched deep-dive reports, subscriptions to all of our daily newsletters, and much more. >> Purchase the report and download it immediately from our research store. >> BUY THE REPORT

The choice is yours. But however you decide to acquire this report, you’ve given yourself a powerful advantage in your understanding of the future of messaging apps.