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What does the future hold for advertising with Amazon Alexa?

What does the future hold for advertising with Amazon Alexa?

Voice activated products have become ubiquitous in the homes of millions of people. It’s only natural that one day Amazon, who leads the market with its variety of Echo speakers, might bring advertising into the mix.

At the beginning of the month, CNBC reported the e-commerce giant was in discussions with a host of companies about promoting products on Alexa-enabled devices. Citing anonymous sources, CNBC said that Amazon was talking to companies such as Procter & Gamble and Clorox about advertising potential through voice technology.

Amazon did, however, deny the report. It issued a statement to several media outlets that covered the story, stating it has no plans to add new advertising functionality to Alexa.

As it stands, Amazon currently does very little advertising on Echo devices. Previously, VoiceLabs, a Silicon Valley startup dedicated to the development of voice applications, created the first Alexa-based ad network to assist developers with monetizing skills. Sponsored Messages, which were brief advertisements positioned at the beginning and end of an interaction with an Alexa skill application, appeared poised to lead the advertising movement for Amazon devices.

“Paid search ads via voice could be much more effective than the paid search ads you see on the web, as with Google. On the web, many have grown numb to ad search results and can easily scroll past the to real search results. On a voice platform, it takes far more work to ‘scroll past’ the first result presented. Plus, depending on how Amazon presents paid results, it may be more difficult to decipher paid results from actual results.” - TechCrunch

The company inked long-term partnerships with big brands such as Wendy’s, Progressive Insurance and ESPN. However, Amazon later changed its ad policies for Alexa, forcing the company to cease operation of Sponsored Messages.

At the moment, advertising is fairly narrow according to Amazon’s policy for developers. Streaming audio such as music and podcasts are allowed to include audio ads. However, Amazon has firm guidelines for such ad opportunities, noting that they may not use “Alexa’s voice or similar voice, refer to Alexa or imitate Alexa Interactions”. Further clarification of Amazon’s ad policy for skills can be read here.

Over the last year, voice-powered products like Amazon Echo and Google Home have become household sensations. Last spring, eMarketer forecasted that roughly 36 million Americans would use a voice-activated speaker at least once a month in 2017. eMarketer also projected that nearly 71 percent of all American adopters of voice-enabled speakers would be Echo users.

“Amazon’s ads likely won’t blare out like TV or radio commercials. Instead, they’ll be more subtle and better targeted. If you use your Amazon Echo to reorder Clorox brand cleaner, for instance, Alexa could suggest you tack on another Clorox product to your purchase, confirmed with a simple yes or no voice confirmation. If you look for instructions on how to cook a recipe or how to remove a stain from fabric, Alexa could similarly offer suggestions for products you may find helpful.” - Slate

MediaPost reported that the Echo Dot, the miniature offering of Amazon’s Alexa enabled devices, led sales of all products sold on Amazon over the holiday season. MediaPost also added that “tens of millions of Alexa-enabled devices were sold worldwide”.
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