While announcing better-than-expected fourth-quarter earnings last week, Amazon chief executive officer Jeff Bezos shocked no one when he said the company in 2018 would "double down" on development for its popular Alexa voice assistant.
Embedded in the company's Echo speakers and Fire TV players, as well as some cars and household appliances, Alexa was the breakout star of 2017 thanks to Amazon's early entry into voice assistant technology — with some reports even referring to the time period as "The Year of Alexa."
Last year, Echo speakers brought in "tens of millions" in sales as Amazon's best product alongside the Fire TV Stick, and millions of Amazon Prime members used Alexa to shop.
"Our 2017 projections for Alexa were very optimistic, and we far exceeded them," Bezos said in a statement. "… We've reached an important point where other companies and developers are accelerating adoption of Alexa."
That's good news for Amazon, which in 2016 began a big push to turn Alexa into a development platform by letting third-parties, including brands, create skills for the system. Alexa also began partnering with third-party devices early on, recognizing that widespread adoption would be key to market share.
Main voice rival Google is just catching on, recently unveiling its version of skills, dubbed "actions." Internet Retailer reported that Amazon's head start gives it ownership of a dominant 70% share of the smart-speaker market, while Google is in second place with 23%. Still, the latter has secured alliances with major retailers including Walmart, Target, Costco and Home Depot, and competition continues to heat up as Apple, Samsung and others come out with their own smart speaker devices.
To stay ahead of the pack, Bezos is constantly introducing upgrades that make it easier for developers to bring Alexa to more devices while tasking them with building more and better Alexa skills — recently adding new ways for them to earn money building for the voice assistant.
"There are now over 30,000 skills from outside developers [and] customers can control more than 4,000 smart home devices from 1,200 unique brands with Alexa," Bezos said in the statement.
Amazon's announcements came days before the National Football League's Super Bowl broadcast, during which Alexa stole the show with her own star-studded commercial. The spot was the most-viewed ad based on Super Bowl game-day data from Google and YouTube — and came with a slick cloud algorithm that prevented devices around the world from responding to the opening scene of a woman asking, "Alexa, what's the weather like today?" (See below.)
Advertising on Alexa
Amazon is gingerly experimenting with ads on its voice platform — where search placement is key because the top result is more likely to be selected than on a web page where it's easier to scroll through options. While there is currently very little advertising on the Echo, Amazon has hinted in the past that it would launch a paid search ad product for Alexa.
Citing sources familiar with the matter, CNBC reported that Amazon has been in talks with several companies including Procter & Gamble and Clorox Co. about letting them promote products via Echo devices, and already is running an experiment that lets companies target users based on past shopping behavior.
"Some of the early discussions have centered on whether companies would pay for higher placement if a user searches for a product such as shampoo on the device, similar to how paid searches work in Google," CNBC indicated.
Currently, some paid promotions are already built into Alexa responses. CNBC gave this example: "There are already some sponsorships on Alexa that aren't tied to a user's history. If a shopper asks Alexa to buy toothpaste, one response is, 'Okay, I can look for a brand, like Colgate. What would you like?'"
However, another report from The Information indicated that Amazon repeatedly turned away Sony Corp. when it asked to put ads on its popular Jeopardy game skill due to fears it could alienate users.
- Best Buy lets its customers order its "Deal of the Day" products via Alexa-enabled devices.
- Sears syncs its full line of Kenmore Smart Appliances with Alexa, letting users control the appliances with a voice command.
- Peapod lets users employ Alexa toadd items to their weekly grocery carts in real time.
- Beiersdorf launched an Alexa skill that guides users to the best Eucerin product for their skin.
- Coty's new visual skill, designed specifically for the Echo Show, offers occasion-based look planning as well as visual "how to's" and quick tips with recommended products from Coty brands. Products can be directly added to Alexa shopping lists.
- Clorox offers a housekeeping assistant skill that lets users receive product offers via email.
- Unilever's Hellmann's and Best Foods offer a recipe skill.