Amazon could be on the cusp of introducing targeted voice ads to Alexa
At the beginning of last year, we wrote about the impact of voice controlled personal assistants and their use in the home. With products such as Amazon’s Alexa and Google Home now becoming ever more popular, the question remains as relevant as ever: in a voice controlled future, where do the ads go?
It seems that Amazon have been wondering the same thing. Insider reports now suggest that they have been in talks with companies such as Procter and Gamble and US cleaning products firm Clorox about the promotion of products on Amazon Echo devices.
Alexa, have you any ads?
Up until now, Amazon has only introduced limited advertising to its Echo service. Currently, if a user asks Alexa to buy a certain product, it sometimes suggests a particular brand. Crucially however, this kind of corporate sponsorship is generic – it is not linked to a user’s search or purchase history.
In the future, we are likely to see Alexa targeting users based on their previous behaviour. If they have bought a specific branded item – for cleaning an oven, let’s say – then Alexa could suggest that brand when they search for a product to clean the kitchen sink. Such insights into purchase history and shopping behaviour could also be supplemented by the kind of advice Alexa is able to offer on everyday tasks. When they ask Alexa how to cook a meal, remove a stain, or do some DIY, Alexa could suggest branded products to use as part of her assistance. The variety of things that people ask Alexa to do represents a wealth of diverse advertising opportunities.
Investing in the voice
This kind of targeted advertising on Alexa could provide a much needed boost to Amazon’s ad sales. Believe it or not, in spite of their dominance over the ecommerce sector, Amazon’s web advertising business ranks only 5th amongst US companies. Mostly generated from sponsorship on their website, Amazon ad sales are predicted to grow to $2.4 billion in 2018, a long way behind Facebook ($21.6 billion) and Google ($40.1 billion). Given the huge amount of data Amazon has on its consumers, this comparatively low revenue is a serious problem.
In general, successfully integrating advertisements into voice controlled systems represents a real concern to consumer driven companies. As people increasingly turn to non visual formats to do their shopping, traditional marketing methods used to attract their attention simply won’t work. On the positive side, however, voice ads executed well could be a real asset to businesses. In contrast to promoted website links, which are easy to ignore, it appears consumers are far more likely to accept the top result suggested by voice operated assistants. If companies can exploit this trait they could do very well out of a shift towards voice activated purchase systems.
Infiltrating the home
Profitability issues aside, questions remain about the impact of voice advertising in the home. As technology gradually saturates the public sphere, the home could be the last safe haven free from ads. Inserting advertising into home technology could therefore seriously anger consumers, especially if they felt they were being manipulated to buy certain products without their knowledge.
It could be that home personal assistants start operating on the Freemium model – where ad free services are only available on a paid subscription. However, it is doubtful that consumers would be willing to tolerate interruptive advertising blasting away at them at any hour.
On the other hand, getting into the home in the first place is arguably the hardest step for digital assistant providers such as Google and Amazon. With sales of voice activated speakers set to continue to rise, it looks like consumers are becoming more and more receptive to these kinds of devices. As with any new technology, initial adoption can be the hardest step to achieve. Working out how to bring in advertising revenue could be a relatively easy task in comparison.
Will voice ads put people off digital personal assistants? Is the convenience of Alexa worth the presence of ads in the home? What’s the next step for targeted voice advertising? Comment below with your thoughts.