Ads On Alexa: Amazon Talking With Companies About Advertising On Echo Devices

Story Update:

An Amazon spokesperson told International Business Times on Wednesday: "There are no plans to add advertising to Alexa."

Alexa users might soon hear ads on their devices. Amazon has plans to push ads on Echo products powered by Alexa, according to a Tuesday CNBC report.

The online retailer is reportedly in talks with companies like Procter & Gamble and Clorox about promoting their items via Alexa.

One of the talking points were focused on whether companies would pay for higher placements if an Alexa user searches for a product like a shampoo on the Echo gadget, the report said. The method is similar to how ads work on Google searches, sources familiar with the matter told CNBC.

The latest discussions suggest Amazon is preparing to launch a determined run at the ad market as early as this year, sources said.

The Alexa ads will focus on sponsorship opportunities within the voice assistant’s skills or use data about a user’s shopping history, the report said. Amazon could allow companies to target users based on previous shopping behavior. For example, the voice assistant could suggest to a customer who previously bought Clorox's Pine-Sol to trying also out its disinfecting wipes.

One way an ad could get ads to a user is if the person asks the Echo device for help about cleaning up a spill, Alexa would then recommend a certain brand. There are some sponsorships on Alexa, in which a user ask to buy toothpaste and the device responds: "Okay, I can look for a brand, like Colgate. What would you like?"

As of now, Echo devices don’t have many advertisements. The introduction of more ads could allow companies to tap into the voice-shopping platform, which has done well for Amazon. This holiday season, millions of Amazon Prime members voice shopped with Alexa for items, including everyday household essentials. Amazon’s success with voice shopping is pressuring companies to do the same in order to keep afloat. Having Alexa recommend products out loud could have a greater impact than ads customers usually see online, which they tend to ignore by scrolling down on web pages.

The boost in usage of voice assistants could be a reason why companies would want to team up with Amazon to advertise. The number of people in the U.S. using voice assistant speakers was expected to grow in 2017 by 130 percent to 36 million, with Amazon taking 71 percent of that market, according to an eMarketer prediction. Meanwhile, Amazon said last week the Echo Dot was the top-selling device across all categories on the shopping platform this holiday season. The company sold tens of millions of Alexa-enabled gadgets worldwide. The online retailer has released multiple Echo devices, with prices ranging from $49.99 to $229. The different prices opens up accessibility to the devices to a wide range of consumers.

Amazon has reportedly been ramping up on ads overall. The company is said to be testing different ad formats, including videos, for this year. Most of the ad plans are focused on search video. Amazon is also looking to increase advertising sales off its platform, including teaming up with third-party tech companies.