One of L2’s end-of-year predictions was that Amazon would begin to monetize its voice assistant platform Alexa. Two weeks later, that prediction already seems to be coming to fruition.
CNBC reported that Amazon was in talks with P&G, Clorox, and other consumer brands about running ads on Alexa. Amazon denies the report, saying it has “no plans to add advertisements to Alexa.”
But Amazon does not have to create a dedicated ad unit for Alexa to monetize the platform. Rather, L2 has learned from its members that Amazon has recently approached major brands asking if they would be willing to pay for Amazon’s Choice, a designation given to best-in-class products in a particular category.
This would boost organic visibility on Alexa, as it holds the most weight in Alexa’s product recommendation algorithm. L2’s Amazon Intelligence: Voice report finds that 60% of top Alexa search results carry the Amazon’s Choice designation.
It’s in Amazon’s best interest to monetize Alexa. Brands are looking for marketing alternatives to Google and Facebook, as well as new opportunities to reach consumers. Amazon is currently better positioned than Google, Samsung, and Apple to capitalize on the future of voice-enabled speakers, with 71% share of the market.
Consumers are also engaging more with Alexa devices than competing devices. The average Alexa user spends 18 minutes a month interacting with the device, compared to just five minutes for Google Home. However, ads could change that. If users react negatively to paid product placements, they might use the devices less frequently — or even switch platforms.