Amazon to agencies: Alexa is the future, but we’re going slow on voice ads

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Amazon invited an agency executive to learn Alexa’s product road map at the company’s Seattle headquarters last spring. The major themes from multiple meetings with Alexa product managers throughout the day were how Amazon could direct individuals to discover and further use Alexa skills through the conversational interface; and what a paid model for skills promotion should be, according to this agency executive, who prefers anonymity given the business relationship with Amazon.

Three other agency executives agreed that skills discoverability is top of mind for Amazon in 2018, based on their conversations with the company. Two of them said Amazon is also looking to earn revenue from Alexa users through advertising, but the e-commerce giant hasn’t yet figured out how to inject advertising into a voice environment without compromising user experience.

“Amazon has been working on a scoring and paid model for skills on the Alexa app for at least nine months,” said Michael Nicholas, co-founder and partner of artificial intelligence agency Born. “But the problem is how to make paid work. Amazon is rightly very protective of user experience — it won’t introduce any advertising on Echo until it is perfect.”

It’s hard to make paid voice-based search work because unlike a website page that lists many search results, a voice assistant like Alexa only presents one result at a time, said Nicholas. For instance, if an individual asks, “Alexa, how do I cook steak?” If Alexa only surfaces a paid option, it may come across like a hard sell. If Alexa recommends a mix of paid and unpaid yet relevant options concurrently, it would be too cumbersome for users. Either way, it will impair the Alexa user experience, according to Nicholas.

“If the first and only brand position is paid, why do I trust Alexa? Meanwhile, a paid result is not necessarily the most relevant, so you can’t rely on Alexa to make the decision,” he said. “There may be a way to do voice search, but as far as I know, Amazon hasn’t yet found a balance between what brands want to pay for versus what is natural to Alexa.”

Thomas Stelter, vp of emerging solutions for agency Possible, echoed that sentiment. “It’s a house of cards situation for Alexa,” he said. “There’s a strong [ad] demand, while consumers don’t want marketers to interrupt their experience.”

An Amazon spokesperson said that the company is not bringing advertising to Alexa.

It may be too early for Amazon to introduce ad products on Echo, but Amazon has focused on and will put more effort into skills discoverability this year, according to agency executives. There are tens of thousands of Alexa skills, but there’s no way for brands to advertise their skills on Echo or the Alexa app and further direct people to install their skills.

“As far as I know, Amazon is working to find ways to make discovery [of skills] easier, but a paid model is not the solution,” said Gela Fridman, managing director of technology for Huge. “The value proposition of Alexa is not an advertising platform — it is a voice assistant that provides utility on how brands engage with consumers.”

Nicholas, on the other hand, thinks Alexa could promote skills discovery by directing users to the Alexa app, where search advertising occurs. For instance, if an Echo user asks Alexa to order a pizza, Alexa could say, “Should I enable the Domino’s pizza skill, or do you want to order from other restaurants?” If it’s the latter, Alexa would direct the person to select a pizza skill on their mobile phone.

“Based on my conversations with Amazon, ultimately I think a lot of [search advertising] will happen on the phone,” he said. “[The Alexa app] will then be optimized like an app store with organic rankings and paid placements.”

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