VoiceLabs announced this morning that it has formally launched a monetization program for Amazon Alexa skill developers and publishers for what it calls Sponsored Messages. Federated Media, the owner of twelve midwestern radio stations, Nick Schwab, the independent developer of the popular ambient noise sounds, and several flash briefings are participating. National consumer brands Progressive Insurance, Wendy’s and ESPN were the first advertisers to sign up. James Bennett, Director of Media and Partnerships at Wendy’s commented:
Wendy’s is focused on bringing our brand voice to innovative new touch points with consumers, and we are thrilled to be the first QSR to leverage VoiceLabs’ Sponsored Messages to reach consumers within their Amazon Alexa experience.
Deliver Revenue and a Good User Experience
VoiceLabs co-founder and CEO Adam Marchick stressed two points in an interview this morning. First, the program is designed to help independent developers and audio content producers generate revenue from their efforts building Alexa skills and growing audience on the platform. Second, VoiceLabs used its analytics platform during a beta testing period to track user experience and sentiment associated with different Sponsored Messages formats. Marchick said the data show that consumers were accepting of the ad formats. He added:
Over the past year, VoiceLabs has collaborated with voice application developers, large and small. They spend nights and weekends crafting great consumer experiences, and VoiceLabs felt they deserved to be compensated. We are proud to release Sponsored Messages, which will enable developers to spend more time crafting great voice experiences. It is vital to the success of the Alexa ecosystem.
Brief Ads Designed for a Voice-First Experience
Sponsored Messages are short ads of 6-15 seconds in length. They are also designed to be run as a series with messages of different lengths. Skill and flash briefing publishers can determine the frequency and timing of the Sponsored Messages that users receive. “We are fortunate to have advertising partners who ‘get it.’ For example, we collaborated with Progressive and Wendy’s to create Sponsored Messages that are both short, and also tell a brand story over the course of multiple user sessions,” said VoiceLabs’ Chief Product Officer Alex Linares.
VoiceLabs lists independent developer Nick Schwab as one of the top ten Amazon Alexa and Microsoft Cortana developers based on the large user base for skills such as Thunderstorm sounds. He commented:
The hardest part about it was the more popular my Skills became, the more money and time I had to spend to support them, with no prospect of recouping my investments. Today, this major issue is solved with VoiceLabs’ Sponsored Messages.
XAPPmedia CEO Pat Higbie added these thoughts related to radio and podcast content publishers that XAPP is working with on Amazon Echo.
XAPP pioneered voice interactive monetization for radio on mobile in 2013 and we were immediately impressed by the VoiceLabs advertising solution for Amazon Alexa. We have partnered with VoiceLabs on behalf of our radio station customers because it provides an opportunity to generate revenue that is in line with a great listener experience.
Working Within Amazon Policy Guidelines
In April, Voicebot was first to break the story about the VoiceLabs program which was in beta testing at the time. Nine days later Amazon released new policy restrictions that prohibit advertising, “except in streaming music, streaming radio or flash briefing skills.” The VoiceLabs program follows that policy. At the time, VoiceLab’s Marchick commented:
“I can understand why they did it. They are really cautious about the consumer experience. That is why we have been collaborating with Amazon so closely. They were aware of the Sponsored Message program we have been running at scale for the last number of months. We have created a new type of ad unit and a new form of audio advertising that consumers are acceptant of and are effective for advertisers. And, we have validated it through extensive testing.”
The Short History of Ad Monetization on Voice Assistants
Many people don’t realize that ads have been running in Amazon Alexa skills and flash briefings for some time. Digiday’s Max Willens revealed in an October 2016 article that the Washington Post was running ads in its flash briefing.
It has sold two sponsorships to help pay for its Alexa channel, and it intends to ramp up the skills and briefs it puts on Echo next year. “We haven’t invested significantly more time than other platforms,” said Joey Marburger, the Post’s director of digital products, “but what we have done has paid off insanely well.”
Google formerly prohibits advertising today through its Google Assistant and Google Home products. However, the digital advertising giant has experimented with at least one ad on the platform that resulted in immediate social media backlash.
However, Voicebot has detected no backlash from Amazon Echo users related to Sponsored Messages that were run during the beta testing period. The lack of a negative reaction may be because the ad placement within skills wasn’t viewed as interruptive or the new VoiceLabs ad formats are simply better aligned with the voice user experience than Google’s first attempt.
Monetization is Crucial for Developing the Voice Web Ecosystem
There will likely be a lot of talk from people that don’t follow this space closely about how advertising will ruin the voice assistant user experience and thwart consumer adoption. Nonsense. As long as it is done in a way that consumers accept, advertising turns out to be a non-issue.
The lack of advertising, sponsorship or other effective monetization options is the bigger risk for voice assistant platforms. If independent developers cannot generate income, they won’t invest in building great voice-first experiences for Alexa or the other platforms. If media companies can’t monetize their content, they won’t invest in the channel. Content may not be king in the new AI world, but it is surely the queen. Voice assistant platforms wouldn’t be very interesting or useful without it. The VoiceLabs programs simply appears to be the first way for developers and publishers to generate revenue from Alexa that consumers will find acceptable.