Get ready for ads on Alexa (AMZN)

Users of Amazon's Echo smart speaker will soon hear advertisements in Alexa skills like music streaming and news updates, thanks to a new platform called Sponsored Messages.

VoiceLabs, the company that Amazon partnered with to allow third-party developers to build skills for the voice assistant, has moved to implement the six- to 15-second ads.

The revenue from these ads will go directly to third party developers, but Amazon could be using this opportunity to try and see whether Alexa users are open to ads on the platform, and then incorporate them into Alexa's proprietary skills such as flash news briefings or shopping lists.

Alexa ads could be a step towards diversification in Amazon's monetization strategy.

Ads may detract from the user experience, but it's unlikely to hurt Amazon's competitive standing. Since it was released last fall, the Google Home has been the primary competitor to the Echo products. While it doesn't have sponsored ads now, it likely will in the future, since that's where Google's parent company Alphabet makes most of its money. So, while ads might be annoying to its users, Alexa's user experience would be on-par with its main competitor's user experience, not behind it, which would likely keep the market share status quo intact.

Advancements in a bevy of industries are helping intelligent digital voice assistants like Apple's Siri and Amazon's Alexa become more sophisticated and useful pieces of technology.

Advances in artificial intelligence (AI) are allowing them to accurately understand more information, while upgrades to mobile networks are facilitating quick transfers of data to robust clouds, enabling fast response times. In addition, the swell of internet connected devices like smart thermostats and speakers is giving voice assistants more utility in a connected consumer's life.

Increasingly sophisticated voice assistants and the growing potential use cases they can assist in are driving consumers to adopt them in greater droves — 65% of US smartphone owners were employing voice assistants in 2015, up significantly from 30% just two years prior.report

However, there are still numerous barriers that need to be overcome before this product platform will see mass adoption, as both technological challenges and societal hurdles persist.

Here are some key takeaways from the report:

They can find an opening in a consumer’s calendar to schedule an appointment, place an online order for tangible goods, and act as a hands-free facilitator for texting, among many, many other tasks.

In full, the report:

Interested in getting the full report? Here are two ways to access it:

Get ready for ads on Alexa (AMZN)

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