News

POV: Amazon Policy on Alexa Skills and Ads

Background

Amazon announced an update to its Alexa Skills policy that limits the ability of brands and developers to incorporate sellable advertising units inside skills. Skills are the branded-content experiences accessible through Amazon’s virtual assistant Alexa available on the Echo and Dot devices. Alexa Skills will now face rejection during the certification process if the skill “contains any advertising for third-party products or services, except in streaming music, streaming radio or flash briefing skills.”

Details and Implications

Until last week, early-adopter brands already engaged with the Alexa platform enjoyed an unusual degree of openness from Amazon that does not exist across other Amazon marketing channels. Brands have not only been able to fully control the conceptualization of experiences, they have also been able to collect and/or own user data and monetize their experiences with ad units of their own design.

Not surprisingly, both Amazon and Google now appear to be tightening control over how brands leverage the platforms for advertising purposes. Amazon’s announcement follows Google’s decision earlier this month to shut down a Burger King ad that featured an employee speaking to Google Home devices across the country—an innovative cross-channel campaign that received as much PR for being cutting-edge as for violating privacy and infuriating audiences.

Despite the current policy limitations, the potential for voice is still large. As companies such as Amazon move forward with integrating artificial intelligence into hardware, a future where we discover and operate new products and navigate our daily lives with voice is clearly imaginable. Today, over 10% of all searches are conducted via voice. By 2018, nearly 30% of technology conversations will be connected with smart devices; and by 2020, over 200 billion searches per month will be conducted via voice.

The opportunities are evolving very quickly, although currently they are limited. As such, Amazon’s policy shift this week should have a very small impact on brands today. Several large publishers, such as the Washington Post, offer voice advertising units; however, the majority of individual Alexa Skills lack the scale, ability to target audiences, and reporting needed to make them attractive to advertisers today. As voice proliferates, the real opportunities for advertisers are those that can scale by running programmatically across devices— and, in the case of Alexa, across skills.

Clearly, voice advertising will also be important to the media and commerce companies that are creating the technologies. We expect that Amazon will look to monetize these new audiences by developing its own advertising products or by incorporating voice into its programmatic platform (Amazon Advertising Platform - AAP). Whether or not Amazon will also tighten control over a brand’s abilities to gather data, is yet to be seen. 

Summary

Voice advertising on Amazon’s Alexa enabled devices is now limited to radio skills, music, and flash briefings. However, the impact on large brands and advertisers is expected to be small, as the opportunity to target audiences at scale inside individual publisher skills was already very limited. As the Alexa ecosystem expands, it’s expected that Amazon will develop its own voice ad products or incorporate voice access into its AAP product. In the meantime, brands can still learn more about the evolving ways customers interact with voice and participate in this evolving marketplace by developing their own AI-driven branded-content experiences, albeit without sellable advertising units.