It’s a bright time for performance advertisers. The strong, foundational media types—TV, Radio, and Digital—are all performing well and at scale. There are more arrows arriving in the performance advertiser’s quiver that lack scale for now, but find their places as complementary performance assets, like Podcasts, Streaming Audio, and OTT/VOD. Then, of course, the bleeding edge of performance media: Smart Speakers.
Between Amazon, Google, and Apple, the Smart Speaker hardware market is remarkably consolidated. However, due to the variety of these speaker’s abilities, skills, and the increases in AI capabilities, the amount of content you can access and interact with is expanding wildly. The versatility of use and wide-ranging applications for these devices could explain the meteoric rise of adoption; individuals reporting ownership in the US has boomed from 7% in 2017 to an estimated 18% (51M people) in 2018, according to Edison Research’s 2018 Infinite Dial Study. This tremendous growth could quickly allow advertisers a solution for reaching individuals, mainly A18-34, in the comfort of their homes. After all, 50% of them don’t even own a radio in their home at all (Edison).
When analyzing the potential value for any burgeoning media type, it’s important to consider scale, content, format of advertisement, and attribution, both on delivery and conversion. Scale seems to be a limitation that is organically becoming less of a concern.
In thinking of content, it may be helpful to consider the nearly boundless potential of what could be programmed and executed on a Smart Speaker. There are the expected content types that would be included on an audio-driven device, such as Terrestrial and Pureplay (Internet) radio, your local AM station, favorite Pandora station, that podcast that you couldn’t finish on your commute, and your classic party playlists from Spotify. Again, those are not surprising, and you could access just as much on your smartphone.
It is upon consideration of the unexpected media that can be played from these devices where tremendous value could be realized for performance marketers. Major news outlets have begun integrating “Flash Briefings” into the playback features for Alexa and comparable short-form, headline-driven news segments are appearing on Google Home as well. By integrating a pre- or post-roll advertisement, an advertiser is able to integrate nearly seamlessly with a trusted news source at the moment when a consumer is at home and leaning in to concentrated, detail-based content. It’s hard to imagine a consumer readier to convert.
Unexplored media territory is only bound by the imagination. For example, a voice-based game (such as Jeopardy) could reward top contestants with exclusive promo codes to e-commerce sites. In another example, weather reports could offer you a new umbrella with free next day shipping if it’s supposed to rain in 3 days. While TV and non-endorsement audio, such as pre-recorded radio ads, are clear breaks in content, new media formats and the corresponding variety in advertisement placements could forge the way for Smart Speakers to be the new ‘native’ darling of the performance advertising universe.
At the media, advertiser, and agency level, attribution is another area for innovation when it comes to Smart Speakers. The largest change in attribution will be the removal of the click in an online, connected environment. Currently, for digital and other “online” media types, the click is relied upon as a method of tracking interest, intent, and in some cases it’s a method of valuation for the media itself. The alternative to the click is the method that is now commonplace to offline performance advertisers: the vanity URL or promo code. While that method is solid (because it’s virtually the only way to track redemptions on a given placement), it leaves room for users to convert without being tracked appropriately.
So, where the click reigns supreme in online environments, and promo codes, vanity URLs, and spike-level models (mainly for TV, and not to be discussed in detail here) dominate offline attribution, Smart Speakers may offer an alternative for its advertising attribution efforts. Since all Smart Speakers are required to be linked to the hardware’s parent company (Google, Amazon, or iCloud accounts), there’s suddenly a direct link between a listener’s shipping address, (potentially) payment information, and even shopping history.
It’s still conjecture to say that Amazon would allow credit card and address information to be securely passed through to an e-commerce site, like Quip, but it’s not too far of a leap to say that, in the least, you’ll be able to order products advertised on the device if they are carried by Amazon, as you are already able to order, by voice, products on Amazon. The only difference between the status quo and this projection is the fact that the product would be advertised and ordered via a specific skill, as opposed to on an ad-hoc basis, and thus could theoretically be tied back to the advertising placement and properly attributed.
The even larger leap comes if Amazon, Google, and Apple can sustainably integrate their payment services across multiple e-commerce back-ends (sounds a lot like a role that Paypal could fill, doesn’t it?). If that could be accomplished securely, you could have orders coming in from voice directly and securely to an e-commerce website. For now, though, the space is too diversified (across three different major corporations with their own payment platform ambitions) to see this as a near-term revelation.
One more method that is less intrusive and requires minimal Personally Identifying Information (PII) would be a call to action that goes something like “Ask Alexa to text you an exclusive link to get healthier teeth”, which upon verbal request would text you a vanity URL that would a) apply your discount and b) allow for attribution on the specific placement. This could be on the very near-term horizon, given its PII risks and information transfer.
Smart Speakers have already demonstrated their potential for scale and mass adoption. They’ve also begun to show the varieties of content that could be possible with creative minds and minimal production dollars. With that variety and audience engagement, new ad units will emerge with corresponding attribution methods, which could look very unlike anything that is currently in the performance marketer’s arsenal.
The simpler integrations have already become available to the marketplace (if you know where to look), predominantly from major, larger media companies, and like other emerging media types, this is high time to begin exploring and evaluating the inventory to assign performance values and, correspondingly, appropriate pricing. It’s exciting to note that select Oxford Road clients will be among the first to engage with these media and audiences in the coming weeks and will be actively experimenting with the new units (and working with networks/platforms to collaboratively ideate new units) as they arrive in the next 6-12 months.
Smart Speakers represent a new dawn for audio that will surely allow advertisers to hit an otherwise unreachable audience, while also doubling down and increasing reach on pre-existing media buys, like podcasts, radio, and streaming.