Amazon to agencies: Alexa is the future, but we’re going slow on voice ads
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.”
Subscribe to the Digiday Retail Briefing: A weekly email with news, analysis, interviews and more covering the modernization of retail and e-commerce.
How Salesforce is gathering its own customer data through its new streaming video play
Salesforce is combining data from Salesforce+ with data gathered from sales and customer service channels viewers inside its customer data platform.
‘We’re all figuring out what our new reality is’: How DTC underwear brand Thinx is diversifying its media mix with more OOH
As a cookieless future and Apple's data privacy updates loom over advertisers, at least one DTC brand is diversifying its ad spend by doubling down on OOH efforts.
Pay On Demand: Immediate payment for work growing in popularity as tech companies fight for talent
On-demand pay could be just the ticket for industries like the restaurant business struggling to find and keep workers in key roles.
SponsoredHow retailers can be ready for holiday shoppers this year
Suchi Sastri, managing director and partner, Boston Consulting Group As the holiday season approaches and the pandemic continues to evolve, retailers want to know what to expect. Will e-commerce continue to grow at the rate it did last year? How big of a role will in-store shopping play in holiday shopping? While it’s still early, […]
Misfits Gaming partners with The E.W. Scripps Company in a bid to bring esports content to Floridian television viewers
Misfits’ is the most prominent Florida-based esports organization. Both its Call of Duty League team and its Overwatch League squad are based in the Sunshine State.
‘It’s really just like a catalog’: Overheard at the Digiday Media Marketplace Strategies Forum
Top concerns expressed included navigating selling on a multitude of new marketplaces and maintaining brand equity in the face of third-party sellers