Here’s a good news, (potentially) bad news story.
First the good news: Even though it typically doesn’t provide sales numbers for its product lines, Amazon touted record purchases of Alexa-enabled products this holiday season.
Given how mainstream and relatively inexpensive Echo and Fire TV devices are, that’s not a surprise. I’d expect record sales over last year’s numbers for those reasons. However, a recent Amazon press release did give us some inkling of the sales figures, which are impressive:
“[T]ens of millions of Alexa-enabled devices sold worldwide. Echo Dot and Fire TV Stick with Alexa Voice Remote were not only the top-selling Amazon devices this holiday season, but they were also the best-selling products from any manufacturer in any category across all of Amazon.“
The company also noted that usage of Alexa on Fire TV is up 889% in the U.S. since last year. Clearly we’re getting close to the point where it might be odd not to see or talk to an Echo or Fire TV in most households. Again, great news for Amazon.
Now for the potential bad news: With a fast growing user base across all types of households, Amazon is looking forward to further monetization of its Echo products. And that may come in the form of Alexa voicing more spoken ads or product promotions to you and your family members. A report from CNBC shares limited details of discussions between Amazon and top-tier consumer brands such as Procter & Gamble as well as Clorox.
I say this is possible bad news from a consumer standpoint, mainly because we seem to go in cycles with digital advertising: Every time a new device, medium or service hits the big time, annoying ads typically follow. I can’t get through a few Instagram photos, for example, without seeing some sponsored product. That wasn’t an issue when Instagram was building an audience, but once it did, the ad revenue started flowing. I don’t want to see the same thing happen with Alexa-enabled devices for a few reasons.
While they’re often an necessary evil, ads can be annoying. I’m now trained to generally ignore them when surfing the web at this point. (Yes, I know I could use an ad-blocker.) But that training essentially took years of using the web before ads essentially became so invisible to me that I just focus in on actual web content.
How will that work with voice, though? Not well, unless Amazon provides noise cancelling headphones with every Echo or Fire TV sold, which of course won’t happen. So Amazon will be walking a very fine line if it decides to ramp up spoken ads on Alexa-enabled devices. Too much “in your face” advertising and Amazon runs the risk of upsetting its customer base. Will those folks abandon the U.S.S. Alexa and get on board with Google, Microsoft or Apple? Probably not but Amazon prides itself on keeping customers happy, so this is risky business at best.
Amazon could integrate contextually relevant voice ads with spoken queries, but I’m not a fan of that. If I say I want to buy a Brand A toothbrush, I don’t want Alexa to tell me about Brand B.
It’s possible that companies could sponsor certain Alexa Skills, which would be decent approach in my opinion. After all, users choose to install a Skill or not, just like they choose to install mobile apps with or without ads. That puts some of the power in the hands of end users because they’ll know for sure if they can expect advertising or not from their personal assistant.
I’m also wondering if Amazon decides to replicate its advertising options on Kindle readers and tablets: You could pay less for an Alexa-enabled device in return for some limited amount of (hopefully not too intrusive) advertising. If you want to squelch the ads, you simply pay the small “upgrade” fee to be rid of them. Since some Echo devices are so inexpensive, I couldn’t see this working on an Echo Dot or Fire TV Stick. But a full sized Amazon Echo Plus or Echo Show? The numbers could work.
We’ll have to see how this all plays out of course. I suspect Amazon is very carefully weighing its options on this front. In the meantime, I’m going to converse a little more than usual with Alexa now so I can enjoy an ad-free experience.
Stacey on IoT | Internet of Things news and analysis