Amazon may put Alexa to work pitching brands


According to CNBC, Amazon is in discussions with some major CPG vendors about presenting ads via Echo devices. The ads promise to work similar to Google search with brands paying to be mentioned higher than other suggestions.
The ads may be offered as suggestions when users ask for information from Alexa. CNBC wrote, “Someone asking the Echo for help cleaning up a spill might be nudged to use a specific brand.” An ad may also be presented as the first suggestion for a brand when shopping for a certain item. Complementary add-on suggestions could also be sponsored. Currently, Alexa’s suggestions are algorithmic and not paid.
“If sponsored brands become the first names that Alexa lists on a long list of results, it’s likely more people will just accept the top result, even if it’s an ad, because that’s preferable to listening to the voice assistant drone on,” wrote Shannon Liao for The Verge.
Some brands might be able to tie advertising to Alexa’s functions — or “skills — although the options are limited. According to Amazon’s developer guidelines, “streaming music, streaming radio, podcast, and flash briefing skills” may include audio advertisements as long as they don’t use Alexa’s voice or a similar voice, refer to Alexa, or imitate Alexa interactions. Any skill-linked ads also must by similar to ad content available outside of Alexa.
Amazon also issued a statement indicating there are “no plans to add advertising to Alexa,” indicating the company is early in the exploratory process.
But many believe brands should already be working on ways to reach consumers via voice assistants and the artificial intelligence underlying the devices as voice shopping expands. And yet sounding like a radio ad isn’t expected to work on smart speakers.
“If an assistant is going to be the delivery mechanism, then it is going to be in that vein that the advertising is developed,” Greg Hedges, vice president of emerging experiences at Rain, a digital consultancy that created an Alexa skill for Campbell’s, among others, told Adweek. “It will be honed as a way of helping the consumer based on their shopping history, their skill/action/app use, their info.”
- Amazon has big plans for Alexa ads in 2018; it’s discussing options with P&G, Clorox and others – CNBC
- Amazon reportedly looking into ads on Alexa – The Verge
- Policy Testing for an Alexa Skill – Amazon.com
- Why Brands Should Be Ready for Alexa Ads, Despite What Amazon Says – Adweek
DISCUSSION QUESTIONS: How do you see ads, if at all, working on voice-activated speakers like Echo? What benefits and drawbacks do you see for voice ads vs. other digital ads? Would sponsored suggestions disrupt the virtual assistant experience for users?
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32 Comments on "Amazon may put Alexa to work pitching brands"
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Founder, CEO & Author, HeadCount Corporation
To think that voice-activated virtual assistants will not be used to promote sponsored product is naïve. These are not merely benign devices meant to provide convenience to their owners — they are a sophisticated marketing channel that will be fully exploited by the companies that provide them and the brands that promote on them.
Co-founder, CART
Right. And the key is that they have to net a value add for the consumer. Advertising and sponsorships don’t need to be a burden. It’s obviously becoming much more personalized and I think we’re at a point where it’s getting so good that it can be in alignment with actual consumer interest and add value all around.
Managing Partner, Advanced Simulations
This would cause me to turn mine into an expensive paperweight! If I don’t know what product I want, letting sponsored products come up first is okay — as long as I can verbally have the offerings sorted by my criteria, not the sponsored ones first.
Principal, Retail Technology Group
Notwithstanding that Mark Ryski is right, the idea sounds intrusive from the consumer’s perspective. I remember when I started listening to rock and roll on FM radio because there were no ads (and because they had the best disc jockeys in the business).
Managing Partner, Advanced Simulations
The good old days, Bob.
President, Max Goldberg & Associates
I can see why brands would want to be noticed via Alexa, and why Amazon would want to create another revenue stream, but as an Alexa user I would find ads to be an unwelcome intrusion. Pitching products could make Alexa’s answers suspect — am I really getting the best information or a form of reality that an advertiser wants me to hear?
Vice President of Marketing, OrderDynamics
Ads are great. We are surrounded by them. However, when you download an app … you expect the paid version to be ad-free and the Free version to have ads on it. In that regard, customers who have bought an Alexa or Echo should have an expectation that they will not have an influenced source rather than a trusted assistant. The challenge with voice is that you cannot easily scroll past the ads when you are in a hurry. I will be curious to see what consumers think.
If this becomes too much of an ad platform, or influenced platform, then shoppers simply won’t use it or will use it sparingly. This is a potential pitfall for each technology adoption.
Advisor, MyAlerts
To imagine the possibilities here, all you need to do is scan the list of skills on the Amazon site. You will notice there are dozens that are reminders to buy or do something.
Strategy & Operations Transformation Leader
Sponsored ads that are powered by consumer analytics would enhance the shopping experience and not disrupt it. Alexa and other voice-activated commerce solutions are at the moment brand agnostic, however the future is bright for brands and retailers to take full advantage of any future partnerships in this area. Voice-activated commerce has only begun to pick up momentum. Once this channel has matured, it will not only provide a more seamless shopping experience but one that is a perfect channel to provide personalized advertising.
The digital-first generation has grown adverse to generalized advertising, and there are plenty of opportunities for brands to capitalize on the personalization side of advertising. Once you weave these strategies with your social media presence then you will have a compelling combination.
Senior Retail Writer
I’m having a hard time envisioning a voice ad on Echo that doesn’t erode consumer’s trust in the device or impact the device’s utility. But, Amazon has always been a consumer-first company. If there is a way to create voice ads that do not negatively impact the customer experience, Amazon will figure it out.
Chief Executive Officer, The TSi Company
Senior Marketing Manager, RW3
Ads if done right can be very helpful and create a new value offering to the consumer but recently many of the ads I hear via audio lack substance and fail to connect the brand with the messaging.
If Alexa starts yelling out ads maybe Amazon will offer a premium subscription service where the user can avoid them for a small fee.
President, Integrated Marketing Solutions
The operative word here is “pitching.” Amazon and most other sites rank order products with preference to brands who sponsor products. Customers expect to see promoted products on the top of their search list. But if pitching means actual voice ads promoting products, that completely changes the dynamics of the Alexa experience and will certainly turn many customers off. Actual pitches for products creates a substantial risk for Amazon that may offset any ad revenue.
Principal, Cathy Hotka & Associates
Asking Alexa a question is going to be a little like going to the Kraft site to explore recipes, where the recommended cheese will certainly be a Kraft product. Alexa will include ads, and customers will learn to filter them out.
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
… perfect!
Founder | CEO, Female Brain Ai & Prefeye - Preference Science Technologies Inc.
Totally agree!
Consumer Advocate, finder.com
I have long wondered when this would happen … when a company builds and engaged and captive audience, it stands to reason that they would want to monetize it. Perhaps an opt-in model will allow Amazon to test the impact on the consumer experience, but I can’t imagine many would willingly invite ads in.
VP Marketing, PebblePost
Context will make or break these ads. I definitely see the upside of asking Alexa for a tomato soup recipe and receiving a suggestion to buy X brand of tomatoes and even where they might be on sale. Doesn’t that make the consumer’s life better? I wouldn’t underestimate Amazon’s ability to beat the odds, yet again.
President, b2b Solutions, LLC
The ability to do something doesn’t mean you should. What comes next — an option to buy the devices in two versions — with or without ads? Oh yes, the one without ads would cost more.
Principal, Your Retail Authority, LLC
Mark is right that retailers will want to find ways to promote through Alexa but — oh no. Let’s not go there, please. Not every gadget is made for marketing. When I ask how to do something, I am not looking for an ad. For my 2 cents.
President and CEO, Stealing Share
It is a slippery slope for Alexa. No doubt this was the commercial plan all along but commercial messages from “my personal Alexa” will anger consumers who already feel a bit annoyed with the commercial intrusion in things like Facebook. Will Amazon figure it out? They have too because Apple will.
Retail Transformation Thought Leader, Advisor, & Strategist
This reminds me of how Amazon’s Kindle devices are available in both ad-supported and ad-free versions based on the price you pay to buy the device. If you have the ad-supported version you see them rather unobtrusively on the screen saver but not mixed in to the actual Kindle content. Since Amazon continues to deliver ads this way, I’d say it’s working for them and must provide some meaningful revenue — enough to offset the cost reduction of the devices. If we assume Amazon can deliver ads via Alexa in the same unobtrusive way they do on Kindle devices, why wouldn’t they?
As long as they are labeled in some way as sponsored, consumers will either like them or learn to tune them out. And if you’re not asking Alexa a shopping-related question, I suspect you won’t see any ads delivered as that would erode the consumer’s experience pretty quickly.
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
Oh, I think it will be tried. But there are huge dangers. To what extremes will people go to avoid ads?
I remember when I was was a teen and the local rock station would announce from “7 to 8, music only, no adds, no interruptions (except from the DJ).” Everyone seemed to know when that time would be and even talked about it.
Then, on television came various types of DVRs that gave people the ability to record programs and fast-forward through ads, which they did. (I would love to see if anyone who records actually doesn’t fast-forward the ads.)
This is a typical CPG type of thinking. How can we take what we have always done and impose it on people? Instead, how about an entirely new paradigm that doesn’t include something as intrusive as advertising?
President, Protonik
This is a bad idea. And hopefully someone at Amazon can get out of the Echo Chamber (so to speak) and see that clearly.
And here’s a contrarian prediction: Alexa devices hit garage sales en masse in about three years. Why? A rumor like this suggests that Alexa is searching for a way to monetize. From what I can see, its primary value for the large majority of consumers remains changing the channel for music. That isn’t enough consumer value for these devices. Hence garage sales. (My metric for products: “Mean time to garage sales.” The lower the number, the less valuable the product.)
President, b2b Solutions, LLC
Love your “Mean Time” metric.
President, Protonik
Thanks, Steve… I suppose it reveals that my wife and I have spent a fair amount of time at garage sales and estate sales… 🙂
Sr. Marketing Services Account Manager, Hamacher Resource Group
Founder | CEO, Female Brain Ai & Prefeye - Preference Science Technologies Inc.
What happened to the promise of Amazon? Will Amazon Echo become a transmitter of ads like a radio or TV station? Every Echo request — “Echo, what is the weather forecast today?” — will be followed by a paid ad! Paid ad placements and incoming missives are the antithesis of individual customer experience; the antithesis of the much-touted goal of one-to-one personalization.
This could be a barricade that Amazon Echo users must endure to use Echo to shop. Wow! What happened to the Amazon mission of connecting people with products they actually love and want to buy?
President, The Treistman Group LLC
The series of responses suggest an expectation that ads are most likely to occur during an interactive phase, i.e. a request for information. Well, if the ad relates to the information I can see where that will work. If the ad pops up randomly and out of context, it’s going to be an opportunity for an Echo competitor.
Consumers open newspapers’ free-standing inserts because they’re looking for the ads/coupons/discounts. There are magazines that are read as much for the ads as the other content (perhaps “Vogue,” “Real Simple”).
In other words, Echo listeners must want the ads/extraneous information (give permission) and the ads’ executions have to fit the format and at the same time break through. Sounds possible, but not easy.
President, Ipsos Retail Performance
I agree with various members of the team; Mark Ryski makes a great point. It’s naïve to think these devices are purely there for the benefit of their owners. Only recently we discussed the lowering of the prices of these devices for market share. The devices will be collecting data and pedaling specific messages.
I then agree also with Bob Amster and this has a real potential to drive people to turn them off. While this is this year’s hot product, it does not guarantee longevity. I can speak from my experience with my older teenage kids that had “Dots” over a year ago and independently they have both turned them off. Amazon will need to ensure all content enriches the experience — highly tricky for paid ads.
President, Raftery Resource Network Inc.
A significant segment of the population already thinks that Alexa is listening all the time and Big Brother has arrived. Then there’s the rest of us wondering why this is taking so long.
Development of the this functionality will be complex and challenging, but not without precedent. Amazon advertisers have learned what works and what backfires in that search environment.
Director of Marketing, OceanX