Amazon launches Alexa+, and marketers want ads

This is Amazon’s latest attempt to deliver on the grand vision it pitched a decade ago: making voice as intuitive for controlling devices as touch. So far it’s been more gimmick than game-changer, but early reactions to this newest update suggest that could change. If it does, the bigger question isn’t what Alexa can do, it is how Amazon plans to cash in.

There’s already a glimpse into that playbook. Alexa+ is a subscription product priced at $19.99 a month, is free for Prime subscribers (Prime costs $14.99 a month), and costs even less with the annual plan (Prime annual fee is $139 per year). The strategy is clear: sweeten the Prime deal and make buying things even easier, so Alexa can help Amazon move more products. What’s less clear is whether that plan extends to ads.

Smart money says it will. Amazon CEO Andy Jassy has made no secret of Amazon’s growing reliance on advertising, given how the high-margin business has juiced profits. If Alexa becomes a bigger part of Amazon’s ecosystem, it opens up even more real estate for ads, and another way for Amazon to turn conversation into commerce.

“We think that there is a need to do it, from the perspective of Amazon’s commercial partners,” said Sue Benson, CEO and founder of The Behaviours Agency. “But there’s also an opportunity for the brand from a consumer perspective for Amazon to continue to be at the forefront of satisfying their expectations. Thanks to the intimacy that Alexa affords.”

Benson’s point cuts to a demand that’s been building for a while now. Marketers want ads woven into the Alexa experience.

Up until now, that’s only happened in limited ways. For example, Amazon has already dipped its toe into ads on its smart display devices like Echo Show, as well as audio-based subscription recommendations on its smart speakers. Not only does that give Amazon the infrastructure for an ads business around Alexa, it’s also provided a lot of intel on what is and isn’t going to work with those ads, said Frank Maguire svp of product marketing and sustainability at Equativ company Sharethrough.

Should Amazon pull the trigger on ads for Alexa+, marketers won’t be lacking for reach. While the platform itself has not shared any recent figures, as of 2019, Amazon revealed that 100 million Alexa-powered devices had been sold. Additionally in the same year, Loup Ventures forecast that 75% of U.S. households would have smart speakers by 2025. Clearly, Amazon likely has at least enough users already to be able to experiment with more ads. The catch, though, is that Amazon has to tread carefully. Too many disruptions and those Alexa users might start tuning out.

As Maguire explained, such disruptions could really impact the perception of Amazon and the experience with one of its main physical products. “Just because a company can, doesn’t mean a brand should,” he said.

Which is why Amazon is clearly opting to play the long game.

“They [Amazon] recognize the risk of alienating audiences who have yet to see the full potential of voice assistants which have yet to be fully realized,” said Joel Daly, co-founder of Artemis Ward. “Not to mention privacy concerns — the combination of tailored advertising with the perceived invasiveness of always-listening voice devices can discourage adoption.”

Amazon declined to comment on this article.