Think about all of the advertisements you see and hear in a day. From influencer ads on Instagram to ads tucked into your podcasts, Americans see 4,000 to 10,000 ads per day, according to an article from Red Crow Marketing. With smart speakers rising in popularity, marketers are finding new ways to advertise to consumers on top of all the print and digital advertising that’s already going on. But what does advertising in the smart home look like and more importantly, how will advertising on Alexa or another voice assistant affect consumers?
The Popularity of Smart Speakers
Let’s start with the devices themselves, the WiFi-connected smart speakers with voice assistants like Alexa or Google Assistant built-in, allowing for voice commands. By 2022, over half of American homes will own at least one smart speaker, according to a study from Juniper Research. Currently, the number is at 36%, with three-quarters of users using their smart speaker every day, a study by Adobe concluded. Whether it’s asking about the weather or the best way to get to work, smart speakers have proven to be a useful and easy way to retrieve information without needing to touch a physical device.
The Adobe study also analyzed the ways that businesses used smart speakers to increase their bottom line. In a survey of over 400 decision makers in businesses, a whopping 91% of them are currently making significant investments in voice devices, while 94% plan to increase their investments in the coming year. Two-thirds of the survey’s respondents thought that voice technology could help drive conversion and increase revenue, while 71% believed that voice technology could improve the user experience. Despite this belief, only 22% of the respondents had a voice app, but in general, decision makers believe that voice search is the new mobile search, soon to become a mainstream marketing method. Sabrina Caluori, Senior Vice President of Digital and Social Marketing at HBO, told The New York Times,
“We saw, partly because Amazon discounted the [smart speaker] devices so deeply, that they exploded…Very quickly, we realized that we really needed to dig in.”
Audio vs. Written Advertising
While TV, radio and print ads can be effective, voice assistants allow users to interact with devices, making advertisements even more specific and powerful. In an article for Vox, Pandora’s Chief Revenue Office John Trimble wrote,
“In a connected world, audio has the power to cut through the clutter — often with a more emotionally resonant and intimate message than other forms of advertising. That’s why the opportunity for brands is so ripe in this voice-first, audio-led era.”
Data demonstrates that Trimble’s estimations are correct. Users are more likely to select a top result from a voice assistant than they are from a web search, as it’s easy to scroll down or ignore written suggestions, according to Lauren Hirsch and Michelle Castillo, two retail and digital media reporters from CNBC.
Another Adobe survey of consumers reflected the effectiveness of voice assistant advertising, concluding,
- 43% of people find voice advertisements less intrusive compared to TV, print, online and social ads, while 42% found them more engaging
- 39% of people who heard a voice advertisement went on to purchase the item
- 35% of people don’t skip through voice advertisements on free services like Spotify or Apple Podcasts.
With a completely new platform, marketers have began to take advantage of anything voice-related, from podcasts to voice assistants.
How Brands Use Smart Home Platforms
Under current company policy, brands can’t directly advertise on Alexa outside of a music streaming service, podcast, or flash briefing. That means, while you might hear a mattress advertisement during your favorite true crime podcast, Alexa won’t randomly suggest that you buy a Casper. Despite this, brands have found ways to promote themselves within Alexa without violating Amazon Alexa policy. There are two major ways in which brands have started to promote themselves on smart home platforms like Amazon Echo and Google Nest Hub:
- Publishing a branded skill, like a Food Network skill for recipes or a Starbucks skill that lets you order a Frappuccino using your voice assistant
- Submitting answers for queries, like having Best Buy provide information for the question “what is the best Bluetooth mouse?”
Despite the fact that brands aren’t technically allowed to advertise on Alexa or Google Assistant outside of these spheres, the aforementioned study from Juniper Research showed that brands will spend nearly $19 billion on voice assistant ads by 2022. Let’s take a look at what brands are currently doing to promote themselves on voice assistants.
Branded skills have become a must for large brands, especially for Alexa, the most popular voice assistant. HBO, for example, has created game skills for their shows West World and Esme & Roy, a children’s show. Oral-B has a skill for Alexa that times tooth brushing, while Toys R Us used voice assistants to help users pick out holiday gifts. Even NPR uses voice advertising, allowing users to respond to ads hands-free, according to an article from Rain Agency. From Tide using Alexa to tell users how to remove stains to Esteé Lauder giving personalized beauty advice through Google Assistant, brands have jumped at the chance to ingratiate themselves in the voice space.
Despite the plethora of branded skills and actions for Alexa and Google Assistant, customers haven’t embraced them like companies have hoped. For example, the Patrón tequila skill was only downloaded by 7,000 people, with only 17% of users utilizing it more than once. Johnnie Walker, a similar alcohol brand, had a skill that was used only 1,200 times, although user interaction was better than with the aforementioned Patrón action. Ray Velez, Chief Technology Officer of the media company Razorfish that created the Patrón skill, told Adweek that customer awareness and knowledge of branded skills isn’t there yet. However, as smart speakers become more commonplace, that is expected to change.
Featured snippets are the boxes that come up first at the top of Google’s search results, helping people find answers to their queries more quickly for both mobile and voice searches. Voice differs from mobile in that it can only say one search result at a time as to not produce a cacophony of sound. Therefore, “the traditional “10 blue links” format doesn’t work as well, making featured snippets an especially useful format,” according to a blog post from Google.
Seeing the market value of being in a featured snippets, brands have begun to optimize content to be placed above the search results. Of course, content needs to be optimized differently for mobile and voice searches. Take the query “how to tie a tie” for example.
As you can see, the website Real Men Real Style is in the featured snippet when I did this search on my desktop computer. However, the featured snippet was different when I asked Google Assistant how to tie a tie.
As you can see, when I did a voice search, wikiHow was placed in the featured snippet instead of Real Men Real Style. On the other hand, when I did desktop and voice searches for “what is the best concealer for dry skin?”, the same website appeared in the featured snippet on both desktop and voice searches. Here is the featured snippet from my desktop search:
And the website Mom Curls came up again when I asked Google Assistant the same question, meaning that this company has optimized their content for both types of searches, as voice searches become more commonplace.
As we know that users are more likely to select the top result on voice rather than mobile searches, brands are scrambling to optimize their content for voice featured snippets.
What Amazon and Google Say About Advertising in Smart Homes
Currently, Amazon limits advertising to podcasts, music, or flash briefings, and says that there are no plans to incorporate ads directly into Alexa. Current audio ads are not allowed to be in Alexa’s voice or in an imitation of Alexa’s voice, and while skills can allow customers to order products or services or tell customers about offers or deals, this must be in response to a specific customer request. Above all, Amazon reserves the right to suspend any skill that they find has advertising or promotion if it results in poor customer experience, according to Alexa policy. Despite Amazon’s insistence that it does not allow ads on Alexa, it’s been reported by multiple outlets that Amazon has met with companies like Proctor & Gamble and Clorox in hopes of placing advertisements on Echo devices, according to a recent article from Security Baron.
Google has also denied that their smart home platform will be used for advertising. At an investor conference, Google’s Chief Business Officer Philipp Schindler claimed that the Google Assistant wasn’t ideal for generating revenue unlike web search results or any ads that appear on screens. Despite this, five advertising attorneys claim that one Google Assistant feature is close to violating disclosure rules, a skill that allows people to connect with local home service providers like plumbers. The results come from a database of companies in the Google marketing program, which is not made clear through Google Assistant. As the FTC requires that search engines disclose their ads, this extends to voice search, according to an article from Reuters. While Google and Amazon claim that their voice assistants are free of advertisements, the companies routinely push the limits of what is considered to be advertising.
What Ads on Smart Speakers Might Look Like
Clearly, voice advertising hasn’t reached it’s full potential, but there are a few avenues it can take. Earlier this year, Amazon filed a patent that would allow Alexa to detect user’s emotions, whether they are sick or tired, as well as their demographics including age, gender and nationality. Based on that information, Alexa can play relevant ads, like suggesting a specific bran d of cough medicine to a person that sounded sick, according to an article from Security Baron. In addition, companies will most likely pair with other manufacturers, like a smart refrigerator partnering with a grocery delivery business to replenish food automatically. These partnerships would also exchange customer data in order to improve products and services, according to Rutgers law professor Ellen Goodman in an interview with The Atlantic.
Last year, Google filed a patent that would scan and analyze the surroundings of homes, offering content based on what’s detected. For example, if the system found a Will Smith T-Shirt, the voice assistant could suggest seeing his latest flick, along with show times and hands-free purchasing. Object recognition could also determine a user’s “fashion taste,” estimate income based on their current electronic or mechanical devices, and use audio signatures to determine gender and race. Using this data, the Assistant could better suggest TV shows to watch, products to buy, and a plethora of other actions. Google could also sell the data to other companies, like selling a user’s kitchen and food data to their insurance company to determine rates, according to Joe Pinsker, staff writer at The Atlantic. While Google and Amazon vehemently deny that there will ever be advertisements through their voice assistants, their patents suggest otherwise.
Consequences of Advertising in the Smart Home
The addition of voice advertising, which depends on intimate details of users’ lives, could have two main consequences according to Pinsker:
- Monetization of every behavior: After realizing that every action they take is a data point for brands to capitalize on, people may start to behave different in front of devices, for example not drinking in front of their Amazon Echo in order to avoid ads for alcohol. On the other hand, automated actions can reinforce behaviors, like a smart shower setting itself to the same temperature every day.
- More data: With increasingly sophisticated artificial intelligence capabilities, smart home devices will be able to capture even more data about users’ lives, which they can then sell to third party companies. For example, information about when a user leaves their home every morning could be sold to a transportation startup.
As consumers become more aware of how companies use their data, “we won’t sell your data” will become a premium, paid option, much like you can pay to have the ads removed from Spotify, according to Barry Lowenthal, CEO of ad consulting firm The Media Kitchen.
What Consumers Think of Advertising in the Smart Home
When it comes to hearing advertisements from their voice assistants, consumers say that they prefer other forms of advertising, according to multiple studies. The Adobe State of Voice Assistants 2019 Study , for example, showed that the majority of survey respondents believed that voice ads were more intrusive and less engaging than online, print, TV and social media ads. Similarly, a survey from PricewaterhouseCoopers showed that the majority of consumers prefer TV ads over voice assistant ads. However, most of the survey’s respondents were open to the latter under a few conditions:
In a third study from software company Invoca, only 61% of people would be willing to hear ads on voice assistants under similar conditions:
- 30% of people would like to be asked before the voice assistant plays an ads
- 28% would like to be able to choose which brands the voice assistant advertises
- 23% of respondents wanted the ads to be connected with their “liked” brands on social networks
- 25% would like the ads to be personalized based on the type questions they ask often
- 18% would like their ads to be embedded in answers from their voice assistants.
As consumers see advertisements in virtually every physical and digital space they enter, the addition of advertising to voice assistants is not welcomed, although it could mean millions in additional revenue for companies.
Although advertisements on voice assistants are currently limited to a few areas, tech giants like Amazon and Google have made moves to make their smart devices even more profit-seeking. As smart speakers become household items, brands have already moved into this space with branded skills and snippets. Using artificial intelligence technology, voice assistants and smart home devices will be able to monetize more user behaviors and data than ever before.
What is the first voice assistant?
Siri was the first voice assistant, later bought by Apple.
Does the Google assistant have ads?
Google has also denied that their smart home platform will be used for advertising. At an investor conference, Google’s Chief Business Officer Philipp Schindler claimed that the Google Assistant wasn’t ideal for generating revenue unlike web search results or any ads that appear on screens. Despite this, five advertising attorneys claim that one Google Assistant feature is close to violating disclosure rules, a skill that allows people to connect with local home service providers like plumbers. The results come from a database of companies in the Google marketing program, which is not made clear through Google Assistant.
What are voice assistants used for?
Voice assistants are used for thousands of different tasks, like setting alarms and timers, making shopping lists and ordering things online, doing web searches, making calls and more.