Alexa Stars in Amazon’s 2018 Earnings Announcement

Alexa Stars in Amazon’s 2018 Earnings Announcement

Amazon

The conversation about the voice interface no longer focuses on whether we’re entering a voice-first world. The questions have quickly shifted to who will lead it and how soon using our voices to search for things and manage our lives will be as second nature as texting.

My teammate Taylor Murphy recently discussed an answer to the first question: no single firm “owns” the voice-first world, but both Amazon and Google have a strong lead. The answer to the question about how quickly voice will saturate our lives comes down to how soon people will be comfortable using voice to do tasks that require extremely high levels of trust in the device you’re using, such as buying a product or handling an emergency. Most people use voice to do mundane things like check the weather. Few actually ask Alexa or Google Assistant to order a pizza or conduct other transactions. That’s because we’re not quite ready to trust a device to interpret our speech with enough accuracy.

The major players in voice are trying to address that issue. In Amazon’s January 31 earnings announcement, CEO Jeff Bezos said, “The number of research scientists working on Alexa has more than doubled in the past year, and the results of the team’s hard work are clear. In 2018, we improved Alexa’s ability to understand requests and answer questions by more than 20% through advances in machine learning, we added billions of facts making Alexa more knowledgeable than ever, developers doubled the number of Alexa skills to over 80,000, and customers spoke to Alexa tens of billions more times in 2018 compared to 2017.”

Normally CEOs comment on high-level, visionary messages in earnings releases, such as top-line growth, major product launches, and corporate strategy. I find it interesting that Jeff Bezos decided to talk about Alexa’s accuracy, and the number of Alexa skills developed. What does this tell you? That Alexa is strategic to Amazon. Jeff Bezos already saw the voice-first world coming, and he decided to help shape it.

So what does all this mean to businesses that advertise online? It means that before you know it, we’re going to turn the corner with voice accuracy. Consumers will use their voices for e-commerce. So it’s important to prepare. For example, as noted previously by my colleague Taylor, advertisers should evaluate their search queries and look for conversional text (“Who,” “What,” “Where,” “When,” “Why,” and “How” are great phrases to focus on). Also, pay attention to any long-tail queries that include a natural phrase such as “near me” or “can I get the number for . . . ”

The above advice applies not only to optimizing content on your websites but also preparing your paid media, such as paid search campaigns. Thinking like a customer might be the most effective way of ensuring your digital marketing efforts are visible to RankBrain – part of Google’s core algorithm that employs machine learning to draw the most relevant results from a search query. RankBrain collects multiple data points like keywords and the searcher’s location in an attempt to identify the intent of a search to then pair the query with the most relevant and valuable result.

Remember, voice isn’t just about using Echo or Google Home. It’s also about doing voice searches on devices where ads appear.

If you sell products on Amazon, the sense of urgency to adapt to voice is even greater. Amazon is clearly using its own retail platform to sell more Echo speakers, and more Echo speakers means more people using their voices to find and eventually buy things on Amazon.

You don’t want to be a laggard in that world. Contact True Interactive to make your online advertising flourish.

 

Amazon’s Advertising Business Explodes

Amazon’s Advertising Business Explodes

Marketing

 

Is there anything Amazon cannot do?

In its second quarter earnings announcement, Amazon reported another stellar performance, with earnings that far exceeded analysts’ projections. Its growth was uniformly strong across its businesses, ranging from its cloud computing operation, Amazon Web Services, to its core retail store.

The most intriguing aspect of Amazon’s growth is the way its advertising arm is faring.  As Reuters reported, “Highly profitable ad sales were a bright spot last quarter. The company said revenue from the category and some other items grew 132 percent to $2.2 billion. Analysts were expecting $2.1 billion, according to Thomson Reuters I/B/E/S.”

The company has now been profitable for three straight years. And although online advertising is not the biggest reason for that profitability, it’s becoming crucial to the company’s future, as Amazon continues to look for ways to counterbalance eroding margins from retail. What’s more, advertising growth means Amazon threatens Google and Facebook, with Facebook’s stock being battered in recent days as its advertising business faces a downturn. The Wall Street Journal sums up Amazon’s advertising growth as follows:

Amazon’s advantage is that it can tell advertisers when a consumer bought a product, showing an ad’s effectiveness. Amazon also is attracting spending that would have traditionally taken place in brick-and-mortar stores to ensure good shelf placement.

“Stepping back, it’s now a multibillion-dollar business for us,” Mr. Olsavsky said.

The hundreds of thousands of customers buying up ads include merchants and brands selling on the site, as well as authors and other advertisers who want to reach Amazon customers. The company is going to keep working on automating more of the process and inventing new products, too.

As we have noted on our blog, Amazon is growing its advertising services the way Google has always done: by offering tools that make it easier to rely on Amazon as an advertiser. For instance, Amazon’s Marketing Services and Advertising Platform products offer options ranging from Sponsored Products (a keyword-based campaign promoting a single product) to Amazon Managed Service (Amazon manages display ads on an advertiser’s behalf). These products make it possible to capitalize on Amazon’s increasing popularity as a search platform.

Amazon is building a strong advertising ecosystem that is now extending beyond its core website. As Amazon develops more advertising products, the company will continue to threaten Facebook and Google. Our advice to clients: pay attention to Amazon’s growth and begin to experiment with Amazon advertising if you have not done so already. Get smart on the platform. For more insight, contact True Interactive. We’re here to help.