Alexa: How will voice impact my mobile marketing?’ Don\'t get left in the dust.

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Alexa: How will voice impact my mobile marketing?’

Don't get left in the dust. Columnist Kristin Cronin believes that as voice continues its rapid advance, marketers need to be planning now for its impact on their brands.

Kristin Cronin on December 29, 2017 at 11:30 am

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If you thought mobile transformed marketing and customer engagement, get ready for voice to change everything again.

Thinking back to the early 2000s, people had no idea how complex and clunky Blackberry devices were. It was the “gestation phase” for smartphones — when the platform was new, expensive and difficult to use. Then Apple and Google came along, leapfrogged everyone and drove a massive adoption of smartphones.

The mature growth phase spurred by Apple and Google kicked off a period of exponential growth. Ten years ago, we didn’t know how big a disruption smartphones would be — but just look at what we’ve learned in a decade.

In essence, the last 10 years created a mobile marketing revolution, which helped brands reach audiences wherever they were, collect loads of critical data and use that data to create and hone real-time interactive experiences with their users.

At that time, if your brand didn’t have a mobile strategy, chances are you were left for dead. (This still holds true today, by the way.) Today, we find ourselves on the precipice of the next catalyst: voice. If you’re not thinking about how to incorporate voice into your mobile strategy, you, too, may be left in the dust.

Disruptor or disrupted?

Needless to say, engagement as we know it is drastically changing. The use of voice technology such as that of Siri, Amazon Echo and Google Home — and soon, Apple’s HomePod — has increased dramatically, and it’s only expected to continue growing.

In many households, it’s become commonplace to ask Alexa to play a song or check the weather, and this technology is even dipping its toes into retail. In fact, research company NPD Group, Inc., found that overall online spending by consumers rose after the purchase of an Echo in every category except for travel. Another example is the partnership between Google and Walmart that will allow customers to “voice shop” via Google Assistant.

Are we past the days of touching, tapping and swiping? Probably not quite yet. But 2017 has already been called “The Year of Voice,” and more and more we’re bypassing screen time and interacting through the medium of voice.

Soon, the norm will not only be talking to our phones and devices but also to our refrigerators, washing machines and cars — some of the more complex devices we own. This is not surprising since it’s expected that there will be more than 30 million voice-activated digital assistants in US homes by the end of this year.

Additionally, by 2020, voice is expected to drive half of all searches on mobile, while mobile is expected to drive half of all e-commerce transactions.

So what does this mean for brands trying to establish themselves in the burgeoning market? Think about it: You likely don’t care from where you get the weather when calling out to Alexa, just that you get an accurate report.

Furthermore, when you’re calling out for Alexa to add milk to your shopping list, she may simply respond confirming the best options based on price. But when you’re using text to Google a question, you are met with pages upon pages of options.

Among many other things, marketing as we’ve known it is going to change tremendously. How can brands compete in this logo-less space? Marketing itself has typically included some form of visual real estate — a website, a mobile app or something else — where there was a logo and a UX that were recognizable and connected you with the brand experience. With voice, these elements disappear.

This means that brands must now focus on making it easy for consumers to search and shop for products using voice commands. And brands will need to be able to track and understand voice interactions in the same way as other interactions to provide the right experience to the right customer at the right time.

Additionally, brands will need to make sure that their apps and voice strategies play nicely together. There are certain experiences that are purposely built for voice interactions, but many that are not. For example, asking for the weather on a voice device makes sense, but if you want to look through the hour-by-hour weather report, an app is still the best experience to consume that information.

Brands will need to be able to balance the immersive experiences that apps provide with simple, powerful voice experiences to ensure they are meeting the demands of their customers. And they will need to be thoughtful about how they approach and design each channel to meet those demands.

The future is now

The beauty of voice is that it can be integrated into an existing app. The use of voice to make it easier to compare prices and hail a car will only help bring convenience to consumers who are growing to expect such service. Soon, we’ll not only be using voice for commands and queries, but we’ll be able to have intelligent conversations with bots.

Marketers need to be thinking about and planning for the impact of voice on their brand and engagement strategies — now. The winners here will be those who put machine learning and big data to work strategically — and quickly — enough adapt to this new reality.

The year 2018 will certainly deliver plenty of opportunities to test and learn, but I believe it’s safe to say that, unlike the 10 years we’ve had with the iPhone trying to get mobile engagement right, voice engagement is going to happen much faster.

With the name of the game being voice, speak now or forever hold your peace.

how this connect to markerting?

Explanation / Answer

Voice is gaining ground as a new platform

Recent estimates put Alexa US sales at 3M devices in 2015, 8M devices in 2016, with a forecasted 25M sold in 2017. With an estimated 50M households in the US with income over $75k, that’s 10–20% market penetration, in 2016 alone. Echo devices control the voice-controlled speaker market with 71% share, ahead of Google Home at 24%. RBC Capital Markets forecasts 60M Alexa devices to be sold in 2020, bringing the total install base to 128M. Furthermore, 61M U.S. users (or 28% of all smartphone users) will use one of the wider voice assistants (Siri, Alexa, Google Now, Cortana) at least once a month. Unsurprisingly, usage is heaviest among the younger demographic, with 34% millennials (ages 25 to 34) expected to use voice assistants in 2017. These devices are expected to hit India in the near term and partnerships/integrations with local players are already underway. If there was ever a time to build, it is now.

What does it look like right now and where to start

Divide your asks in a day into deterministic and non-deterministic questions. Voice assistants can definitely help you with the former. Some of the top use cases on voice devices today involve these deterministic tasks: Smart homes, Music, Productivity, Gaming, News/trivia. And while this assistant can’t currently help with your quarter life crisis, it could hook you up with the right person to speak with very soon.

Since voice platforms are early, unless you have a high amount of conviction on which platforms become the Android/iOS of voice, I’d suggest starting with a mobile browser that could let you quickly test product-market fit on a use case prototype. The interesting thing about voice is that the Minimum Viable Product could actually be a human sitting on the other end testing the latent demand for the use case. Once you have enough confidence in the demand, pick the device that would have maximum adoption among your target segment. Products building on voice interactions require two key steps: Automatic Speech Recognition (ASR) and Natural Language Processing (NLP). ASR is fairly commoditized today but NLP still remains a challenge. The way to address this and build data defensibility is to start with a specific use case which would probably be linked to a specific target segment. A few segments that would see easy adoption here could be:

1.Kids: Anecdotally, this is the segment that sees a lot of organic adoption. And intuitively so: kids don’t come with the legacy interface inertia we adults do (tap type tap type) and voice is their most natural way of interacting with any intelligent object, human or machine. Kids will also ask a bunch of deterministic questions and guess who will not run out of patience answering them?

2.Employees at work: Taking notes in a meeting does not require any skill, and yet is important but distracts you from engaging more actively in the conversation. A lot of secondary research is now a Google Search away, and yet actually getting the data takes a lot longer than it should. Some of these products are already in the market, but picking up and solving for specific industries would do a lot for the accuracy. Simple example: I need to find the P/E ratio of a company X, and really all I need is someone to build a product that fetches the market cap and revenue numbers from the top 3 stock tracking sources.

3.Non-English speakers: Very similar to the kids segment, first time Internet users in India do not have the legacy inertia of the smartphone and actually interact with machines in a very similar way as they would with humans. (Search queries would be entire question statements “what is the capital of indonesia?” versus keyword searches the more mature Internet user has now grown accustomed to)

4.Humans in cars (hands free situations): Music, navigation, additions to the shopping list as you mull over the futility of all human endeavour in a traffic jam? Since driverless cars are not even close to being reality in India in the near term, there’s a lot of latent demand in this market.

New ways to monetize

One of the biggest challenges impacting development for these voice devices is monetization. Unlike the app economy, where display ads is a quick way of making money if you have built an app that gets to some critical mass of distribution, most voice platforms do not allow regular advertising on your content and for good reason. Unlike visual media, voice is a linear format. Cheap real estate on the periphery of your vision is the perfect spot for display ads, but there is no such analog for voice. Your experience is one hundred percent interrupted to make way for a sponsored jingle. For this reason, Amazon does not allow developers to monetize using ads and is unlikely to do so in the next couple of years till the devices become more mainstream. This is the catch-22 situation voice devices are dealing with. Developers have little incentive to build for platforms that don’t let them monetize and users have a smaller opportunity cost if there isn’t a lot that can be done with these devices anyway. What this pushes you to think about though is new ways to monetize.The fairly conventional ways of doing it could be:

1.User subscription: There has been enough evidence of people paying for great experiences built around audio media (Spotify), virtual assistants (x.ai) and voice is actually a great interface for both those use cases as well as many more.

2.Commerce: As discussed previously, it’s quite intuitive why Amazon was the company pushing out voice devices. Nothing pushes impulse purchases like voice commands.

3.Gaming: Mobile games remain Tencent’s biggest revenue generator (~$10B in 2016, ~50% of its annual revenue). A plethora of gaming companies were built on the app economy and the space is all but open for voice. Also, gaming interactions are more deterministic in nature and hence easier to build for.

4.Saas-based developer tools: Again, a fairly linear extension of what we have seen in the desktop/mobile world. Where there are gold mines, you need pick-axes. Analytics, accent filters are a few that come to mind.

Platform shifts don’t happen everyday, or even every year, which is why I’m extremely excited about the opportunities that open up with voice interactions.

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