Improving search and advertising are the next frontiers for voice-activated devices
Despite millions of orders for voice enabled devices, vendors have yet to map the uncharted territory of voice enabled search and advertising.
Indeed, as voice search expands — to the tune of 50 percent of all searches by 2020 (according to some estimates) — so, too, do opportunities for platforms to cash in beyond products and services. In fact, in an earnings call last year, Google acknowledged voice search will drive industry-wide change, but it did not detail its plans.
These devices are already in a massive (and growing) number of American homes.Amazon’s Black Friday weekend sales saw millions of orders for voice-enabled devices that could help generate $10 billion in additional revenue by 2020, split evenly between device sales and shopping, according to investment bank RBC Capital.
And they’re already being used to make significant numbers of purchases. A study from NPR and Edison Research found 26% of participants use their smart speakers regularly to add to their shopping lists and 57% have ordered an item through their smart speaker. Of these consumers, 59% said they have ordered a new product they have not previously purchased and 49% have reordered an item.
While industry observers like Duane Forrester, vice president of industry insights at data management firm Yext, say initial e-commerce transactions on these devices will likely remain reorders in the near term, that won’t be the case for long.
“There is a huge push… for the holiday season…and with so many new devices coming to market, we’re bound to see an upswing in initial order instances as well,” Forrester said.
That’s likely what Amazon is trying to achieve by enabling consumers to ask Alexa to shop Oprah’s Favorite Things and by offering incentives like early Black Friday deals via Alexa.
And while noting Alexa’s financial impact on Amazon “also carries significant uncertainty” because it’s early days in voice search, RBC said it sees “potential financial tailwind” in additional platform revenue, like the promotion of voice skills.
Meanwhile, Google’s partnerships with Walmart and Target boost its ability to sell goods via Home –- and challenge Amazon in sectors like same-day delivery, Forrester said.
A Google spokesperson had no further comment. Bing also declined comment.
When asked about its monetization plans, Amazon sent the following statement: “Our focus is on building the best possible experience for our customers and the rest will take care of itself…”
While shopping is one piece of the voice-enabled search pie, it’s hardly the only one. Forrester said he has no doubt search engines have a plan for monetization given the billions of dollars in ad revenue at stake.
And Jacob Davis, head of search at digital marketing agency iCrossing, said interacting with a device like Alexa, in theory, provides a smooth, quick interaction, which is what consumers want, so we’re likely to see platforms continue to invest and advertisers pay attention to “when they can throw money at it.”
But what does an ad look – or sound – like on Echo or Home?
On March 17, Google Assistant reminded some Google Home users that Disney’s Beauty and the Beast was in theaters in a break between traffic and news.
And while Burger King won a Grand Prix at Cannes for an ad that activated the devices with, “OK, Google, what is the Whopper burger?”, and South Park made voice-activated mischief of its own in the premiere of its 21st season, the Beauty and the Beast example is the closest the industry has come to overt advertising in voice-enabled devices to date.
A Google rep, however, said it “wasn’t intended to be an ad” and rather marked Google Assistant “[calling] out timely content.” (It was also reported no money was exchanged for the mention.)
That’s perhaps because there are a number of risks with voice advertising. And first and foremost are consumers resistant to advertising in a new medium.
Tim Eschenauer, group director of search and social at media and marketing services company Mindshare North America, noted users were unhappy with Google’s Beauty and the Beast promo in part because they had already shelled out $130 for the device on which they heard it.
“It’s one thing to run ads on a search engine, which is free – but in terms of personal assistants, this is going to be a challenge for Google if they want to grow share in that particular market from Amazon,” he added.
In addition, Forrester noted if consumers believe a voice answer is paid, they could lose trust and the credibility of the service could be damaged.
Trust will also play a key role when serving editorial content or making purchase decisions.
That’s according to Davis, who added, “When you can see multiple search results on a screen, a user has options – even if they are dictated by an algorithm. With voice alone, they might only be served one or two results without further prompting. Will that sit well with people? Likely not.”
Davis also noted voice eliminates visual brand assets like logos, packaging and colors that build credibility with consumers.
Yet another challenge lies in consumer reaction to voice results that are wrong or to a voice assistant that doesn’t fully understand a query, said Tom Caulton, digital marketing executive and SEO consultant at digital marketing firm Dijitul.
“Whereas when you type something on your phone, tablet or computer, it’s much easier to modify your search to get the results you were after,” he added.
Mike King, managing director of digital marketing agency iPullRank, noted another problem is there’s little data on performance in voice search, so it’s still hard for advertisers to know whether their efforts are worthwhile.
“We’ve seen some cool commercials that take advantage of it, but the real opportunity right now is making a hit song with, ‘Alexa, buy me groceries,’ in the chorus,” he said.
At the same time, Davis said ads are a natural extension for any platform fattening itself on consumer data – and particularly one so closely tied to commerce.
“What people have to understand is it won’t be ads in a very traditional sense of the word,” he added. “You won’t see TV spots, movie trailers or [out-of-home] billboards translated to just voice. You’ll see smart, data-led marketing that is more closely tied to making purchases and conversions.”
Pete Meyers, marketing scientist at SEO software and tools firm Moz, pointed to radio as a potential model, but said there will be a lot of trial and error.
“We have Google returning organic content [like Featured Snippets and local results] directly on voice, which means there’s a model for returning ads,” Meyers said. “What will work, resonate and be trackable has a lot of hashing out to do, but I think we have models of how this could evolve.”
And Forrester said consumers will eventually be able to identify an ad in this environment and become ad blind, which will spur further innovation in voice advertising.
For now, Meyers thinks search engines will look at custom content.
“Recipes are a good example right now. This is a type of result where voice search is unique from desktop or mobile and we get an experience tailored for voice and a search appliance,” Meyers said. “It’s likely that this type of content could be sponsored soon, such that money is changing hands, but consumers don’t see it as an ad in any overt sense.”
Incidentally, the rep said Google’s focus right now is on “creating a great user experience and making sure that the Google Assistant can help you get more things done in your day.”
What’s far more likely in the near term is Amazon and Google will use information from voice searches to push ads into other properties, like search results or email.
“This is the model for the walled gardens of today,” Davis said. “You might not necessarily see ads for golf clubs in Gmail after asking Google Home to help find the closest driving range, but you will give them another data point about your behavior and consumption habits. And all of that will roll up to inform their profile of you as you’re targeted in various ways across that company’s vast ecosystem.”
And, per Forrester, the data gleaned from voice is much richer, which will further enhance personalization, but the tricky part will be getting beyond ad blindness in Gmail and in search.
Featured Image: Bryce Durbin/TechCrunch
Published at Wed, 20 Dec 2017 11:30:51 +0000