Apple Homepod Exploration – Examining The Use and Relevance of The Technology in More Detail

Building on on-line shopping success, the genius of Alexa was to bring the on-line experience into the home without the keyboard and screen interface. These are two major barriers to a continuing digital experience. People used to (and still do) use VAD in their car through programs such as Siri and Cortana and bringing it in-home was the next logical step. And mobile phones still have limitations with their small screens and awkward inputs.

The real value in VAD for Amazon and its competitors is threefold; consumer value, direct vendor value and indirect vendor value. The perceived value the device brings to the consumer should not be underestimated. The device is seen as ‘cool’, ‘leading edge’, ‘futuristic’. Many people like to identify themselves as early adopters, and this device fits their need perfectly. The value of having contextual information provided on-demand is also a compelling driver for early consumer adoption and the ease of use provided through voice (removing the need for physical (keypad and mouse) interaction) is a novel and compelling driver for the consumer.

Driven by this value proposition, the vendor sees value both directly and indirectly. Obviously, profits generated from the sale of the devices themselves (albeit at presumed modest margins) is one value source. Tied to use of the device is a subscription service (e. g. Amazon Prime) that generates valuable recurring subscription revenue, as well as being able to offer other products and services to the customer on-line (e. g. video streaming). Perhaps the most lucrative and long-term value the vendors of VADs receive is indirect. VADs record all instructions given to them and pass these requests to the vendor’s cloud service. A massive volume of data is thus acquired; data that is sourced from the heart of the consumer; the living room, the kitchen, the car etc. Analysis of literally terabytes of this data is a goldmine to the digital marketer. This includes demographic data, information requests, items purchased etc, and it is this data that provides a basis for Amazon to create parity with Google search through the inputted search terms the Google engine retains. Amazon can utilize this data to hone their digital marketing strategy, advance their Artificial Intelligence (AI) capabilities and sell the data at a premium to third parties for their marketing analysis.

What is truly elegant about this approach to modern digitized marketing, is that is creates virtually a win-win situation. Consumers are obviously demanding more VADs. New York consulting firm Activate Inc. estimated that Amazon sold 4. 4 million Echo units in its first full year of sales, after becoming available to the general public in 2015. CIRP also reported that awareness of the Echo continues to increase, climbing to 69 percent of U. S. -based Amazon. com customers in September, up from 20 percent in March 2015.

With a VAD device in millions of homes, vendors have established seamless tendrils into the hearts and minds of the consumer from the comfort of their sofa. To illustrate how this data can be used to effect by the digital marketer, let’s look at an example: An Amazon Prime account enables you to enter details about you and your family, and to get the optimum use from Alexa, you need a Prime account. Let’s say a family makes a series of enquiries via Alexa around summer holidays, “What is the temperature in Greece in July?”, and “What airlines fly to Crete?”. Amazon collects and correlates this data with demographic comparatives over time. Given enough trend data on these enquiries, Amazon can then use Prime to target holidays, airline discounts, summer books etc. to Prime members with a similar demographic profile. Amazon also has the option to sell this (anonymized) data to on-line travel companies such as Expedia, booking. com etc. Companies pay huge amounts for this data, since this is now becoming the only real way to compete in this digitized environment. Now imagine this similar process for hundreds of thousands of other correlated enquiries (cars, houses, clothing, groceries etc. The list is potentially infinite). The uplift in revenue created from these insights pales into insignificance compared to VAD sales and on-line subscriptions. They are merely vehicles to provide intelligent recommendations and derive resultant behavioral data.

Bringing voice to the user experience takes creativity and a shift from traditional marketing strategies. Establishing an impactful VOD marketing strategy takes time and research. Like any marketing strategy, you need to firstly establish the needs of your consumer and secondly you need to link your product or service to the consumer by adding conversational interfaces to your product. On Amazon Alexa or Google Home the best way to do this is through a “skill” or “Action”. A skill is effectively a voice driven app that can bring products and services to life on VADs. You can enable and disable them through the Alexa App. But like any marketing medium, creating relevant and interesting voice content, is the first step to success.

The popular “Ask Purina” skill is a clever trust building strategy that enhances the likelihood of the consumer picking that brand over another when purchasing dog food. The skill provides detailed and educated answers about dogs, food, best breed for children etc. providing a trusted information hub for dog owners. So although not resulting in direct sales, it builds brand awareness and improves Purina’s brand reputation. Impressively, Purina has also integrated it’s content on Amazon’s integrated inhome product the “Echo show” displaying images of various dog breeds. Echo show is a product containing mini speakers and a touch screen which shows visual output for responses from Alexa assistant. Marketing integration at its best!

US antihistamine brand Zyrtec is another brand that has cleverly embraced bringing the voice to the user experience through its Alexa skill which informs consumers of the pollen count before leaving their home. Inevitably if the count is high, allergy sufferers are encouraged to pick up allergy medicine from the pharmacy. It doesn’t overtly mention the brand name but in order to find out the pollen count by saying “Alexa Start Zyrtec” the brand is top of mind and a likely choice for the consumer when purchasing.

With no imagery on the Echo assistant (and the Echo Show is of limited distribution currently), the script has to be very clever with a clear call to action without going overboard. For example, if there are too many ads during the skill, your consumer is likely to lose interest with consumers never liking to feel like they’re being “sold to”. Amazon has pulled together a very useful skills kit for businesses which helps a brand consider what users will ask and therefore design the voice content around them in a natural and effective way.

With the rapid progress of Artificial Intelligence (AI) whereby consumer behaviour is constantly analysed through purchasing behavior, reviews, queries etc. the ability to meet consumer needs and tailor offerings is stronger than ever. This changes the marketing strategy from the traditional (and costly!) approach of building a relationship with the consumer to optimising their product’s position on VAD or AI platforms. Marketers basically need to optimise their products or services for voice assistants by making the brand names easy to understand and ensuring their brand ranks high in voice search. A software called “Schema markup” will help voice search engines link to the content of your website. The marketing budget is arguably better spent on ensuring a high or preferential position rather than on relationship marketing campaigns such as loyalty programs or even awareness programs such as poster or TV campaigns. “30% of smart speaker owners say that their speaker is replacing time spent with traditional AM/FM radio and TV. ”

As with any advent of new technology, there are not only massif benefits but massif drawbacks as well. It’s common knowledge that web services are already gathering date and information about each and every one of us, so does the rise of this technology run a bigger risk of invasion of privacy as users are more likely to have their guard down around VAD (as it’s “always on”) over inputting words on a keyboard/ search engine. Alexa is clearly recording our information through the Amazon servers and that information/ data is very valuable. It’s useful to them and valuable to their customers who want this data. We have all heard of the accidental orders and also of conversations being accidentally recorded and sent to a contact etc The security of the device itself is also of major concern. The war on cybercrime is akin to an arms race, and VAD will almost definitely become part of the cybercriminal’s arsenal for compromise. Although VADs have seen a significant early adopter reaction, the much larger pragmatic market will likely be waiting to see what privacy and security flaws present themselves before comprehensive adoption occurs. In the future, perhaps, hackers might be capturing our voice and using a key piece of our identity for dark reasons. .

Finally, perhaps the most significant threat to the success of VAD is the sophistication of the voice recognition technology itself. VAD is far from understanding conversational prose, despite decades of research and technological breakthroughs. Google CEO Sundar Pichai announced in 217 that the company’s speech recognition technology has now achieved a 4. 9 percent word error rate. Put another way, Google transcribes every 20th word incorrectly.