Are voice-enabled devices a threat to Google’s ad revenue?

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January 27, 2017 by Paul Dughi

amazon_echo_unpacked_15978606333

Voice-enabled apps and devices seem to be the next big thing. It was the clear star-of-the-show at this year’s Consumer Electronics Show in December.

But using voice to do searches may reveal a vulnerability for Alphabet (aka Google). While its Google Home device may compete in the market, it — and the Amazon Echo and Dot — lack one big thing: a screen. And there’s the potential issue for Google: without a screen, how do you show the ads?

Searching on your phone, tablet, or PC, it’s easy to skip by the paid search ads at the top if you’re inclined to find what you want. Having to listen to a handful of paid search results from advertisers that bought keyword that may — or may not — help you find what you’re searching for is a whole different story.

The big gun in the space right now is Amazon’s Echo. More than 7.6 million Amazon Echo devices were sold in the past two years with sales doubling in 2016. But Amazon has a significant advantage over Google in this area. It doesn’t need the ad revenue to make it successful. Echo owners, per Amazon, increase their spending on Amazon roughly 10% after purchasing the device. That upsell alone makes it worthwhile for Amazon.

Google’s Sundar Pichai was asked about the potential disruption to Google’s paid search ads from voice during its earnings call in January. He said he’s comfortable with the way things will play out in the future

“We think about it from a long-term perspective,” Pichai said. “So I see more opportunity than challenge when I think about voice search.” — Sundar Pichai (via Business Insider)


Echo Image: By brewbooks from near Seattle, USA (Amazon Echo unpacked) [CC BY-SA 2.0 (http://creativecommons.org/licenses/by-sa/2.0)%5D, via Wikimedia Commons

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