The base of Amazon Echo, a smart speaker home of voice agent Alexa
Some marketers might think Amazon wants to turn devices featuring its Alexa intelligent voice agent into vehicles for advertising.
Nope, says an Amazon VP.
‘No plans for advertising.’ At Fortune magazine’s conference last week in California on “Most Powerful Women Next Gen,” Amazon VP of Alexa experience and Echo devices Toni Reid pointed to the continuation of a service-based monetization model for the platform.
There are “no plans for advertising” she said, noting that customers pay for services like Amazon Music Unlimited, audio books and others.
In June, an experiment in audio ads for Alexa was discontinued, and a report in January that Amazon was testing consumer brand ads for Alexa was later denied by the giant retailer.
The launch of ‘consumables.’ This past September, the company introduced one potential revenue stream: “consumables,” or premium content sold within skills, the custom applications made by developers and brands for Alexa devices.
It pointed to virtual game products, one-time purchases of interactive stories, subscriptions to premium content and similar in-skill sales.
Of course, there is also another huge sales opportunity for Alexa: serving as the voice front-end to the world’s largest store.
Why you should care. Smart speakers in the market are expected to number 100 million units by the end of this year, with as many as 225 million being in use within two years.
In other words, they have become a major installed base of interactive devices in the home, potentially serving as a front end to smart home devices and many kinds of services. But the emerging question is how they generate income, aside from the sales of the voice-driven devices themselves by Amazon, Apple, Google and others.
While e-commerce has blossomed on web sites and in some apps, online content has largely been supported by ads. So, it’s natural for marketers to expect a similar evolution for these content-supplying devices. But ads can change the nature of an appliance like a smart speaker, and Amazon’s stand against them on Alexa devices could enhance its role as a trusted agent.
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