Amazon’s CEO, Andy Jassy, has announced the company’s intentions to integrate advertising into Alexa Plus, its recently launched generative AI voice assistant. During a call to discuss the company’s second-quarter earnings, Jassy stated that enhanced user engagement through the assistant would “create opportunities for advertising to assist with product discovery and generate revenue.”
With users expected to interact more frequently with Alexa Plus, Jassy suggested that advertising could become more prevalent. He also indicated that while Prime members currently enjoy free access to the feature, non-Prime users may have to pay $19.99 per month, with a potential for increased subscription fees as new functionalities roll out. “As we keep adding features, there could be a subscription element beyond what exists now,” he remarked.
The Devices and Services division, which includes Alexa and Echo, has faced profitability challenges. To enhance the financial viability of Alexa Plus, Jassy is investigating new revenue streams. However, the pricing model raises questions, as potential customers might prefer a Prime membership at $15, which also encompasses Alexa Plus features and various Prime benefits.
The incorporation of advertising is a natural progression, particularly since Echo devices already feature ads. Current advertisements on Echo Shows can include full-screen placements that display randomly and without opt-out options.
Another avenue for advertising is Alexa’s “By the way” feature, which provides product suggestions in response to user queries, often encouraging purchases from Amazon.
In February, when Alexa Plus was introduced, the head of Devices and Services, Panos Panay, reassured that existing advertising models would remain in place. He noted that such strategies aim to keep customer costs manageable.
Having tested Alexa Plus, I have yet to experience any advertisements or “By the way” prompts. The assistant is still in the Early Access beta phase, which hints at forthcoming advertising innovations. However, I prefer a version devoid of intrusive promotions.
In a potential advertising model, Amazon previously introduced a “Customers Ask Alexa” feature, enabling brands to contribute answers to frequently posed questions. A more conversational Alexa Plus could serve as an excellent conduit for such sponsored responses. However, Jassy’s ambition for Alexa Plus to become the “World’s best personal assistant” raises concerns about the credibility of an assistant that might prioritize paid recommendations.
There could be the possibility of an ad-free tier for Alexa Plus, akin to the ad-free subscription models introduced with Prime Video. Nevertheless, for Alexa Plus to succeed in monetizing its features, it must deliver tangible value to users.
While my experience with Alexa Plus suggests it is not ready for complex task management, its foundational capabilities show promise for future enhancements.
Generative AI is poised to revolutionize voice assistant technology, and Amazon seems well-positioned to lead this transformation with enhanced conversational skills in Alexa Plus, which currently exceeds the offerings of competitors like Apple and Google.
Consumer willingness to pay for AI-driven features remains uncertain. Other tech companies are experimenting with subscription models for advanced AI tools. As an existing Alexa user, I would consider investing in a premium version that reliably performs tasks without advertisements—however, a more talkative assistant that focuses on promotion would certainly dissuade me.
