Amazon Wants To Build Digital Advertising Business For Alexa

Amazon’s Alexa voice-activated digital assistant is being turned into an advertising business for the eCommerce giant, with Amazon reportedly in talks with companies about running ads on its Echo devices.

According to news from CNBC, citing people familiar with the matter, Amazon is talking to consumer companies including Procter & Gamble and Clorox about advertising on Echo devices, which are powered by Alexa. CNBC noted that some of those early conversations were focused on whether or not companies would pay to be placed higher in searches on the Echo — similar to what happens with Google searches. The report noted that since Amazon doesn’t do much advertising on Echo, consumer companies were worried they would be shut out of the voice movement; this new opportunity, however, should alleviate some of that concern.

Amazon hinted it could do something like this previously, but sources said the meetings with consumer product companies show Amazon is serious about advertising early in 2018, with different promotional opportunities currently being tested. In one case, Amazon is letting companies reach customers based on what they purchased in the past. In another test, Amazon is allowing brands to promote their goods without being tied to past purchases on the part of the consumer. For example, when someone shops for toothpaste, Alexa could look for a particular brand, say, Colgate. A spokesperson for Amazon told CNBC the company isn’t planning on adding advertisements to Alexa.

The move on the part of Amazon to potentially embrace advertisements on Echo devices comes at a time when its voice-activated speakers and Alexa are wildly popular with consumers around the globe. Shortly after reporting the Echo Dot was Amazon’s top seller during holiday 2017, Alexa, the artificial intelligence (AI) that powers the Dot, notched a victory of its own. According to reports, Alexa jumped to the top spot in the Apple App Store; it has remained there ever since. This is Alexa’s first time in the number one spot.

So many consumers purchased or received Echo Dot devices over the holidays, in fact, that it is presently sold out on Amazon. Customers must add their names to a waitlist and live with the uncertainty of delivery “soon,” according to Amazon’s site. Alexa Buttons are also sold out. As a point of comparison, Alexa’s rank in the App Store had been somewhere between 60 and 90 in the earlier part of Q4. All those downloads point at new owners, too, as those adding a new Echo to an existing line-up would already have the app. The Alexa app serves no purpose other than to work with Echo devices, so there is little chance non-owners went on a downloading binge.