This is the end of another quarter, which means it’s time to make another call for earnings, with the idea of generating more revenue. This time it was Amazon CEO Andy Jassy, who told shareholders on Thursday that there were “huge financial opportunities” to launch ads through the company’s new AI-powered voice assistant Alexa+.
“I think over time, people will have the opportunity to have more conversations to make the ad work – to help people find discoveries, and also as leverage to boost revenue.”
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Alexa+ has reportedly attracted millions of users since its launch earlier this year. Unlike the original Alexa, the Alexa mainly turns off the lights and sets the timer, while the Alexa+ is designed more dialogue, context-aware and AI-powered. It can help you plan date nights, entertain your kids, and even dabble in basic image and video generation – all under the banner of your $14.99/month Prime subscription.
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But so far, Amazon Alexa has been an ad-free experience. It has also been around for more than 10 years and has not made any money. Therefore, the company’s internal staff believed this was a “huge failure”.
Of course, Amazon is not alone in trying to figure out how to make AI pay by itself. Both Google and Openai explore ad integrations in their AI products to generate revenue. Openai CEO Sam Altman is especially a well-known hub: once he is firmly opposed to the ads of chatbots, he reverses the course and may open the door for advertising in a future version of Chatgpt.
Regardless of motivation, injecting ads into Alexa+ marks a major shift in user experience and Amazon’s strategy, especially given the long-term costly maintenance and difficult-to-profit history of assistants. Ad-supported Alexa+ could be Amazon’s attempt to eventually turn its once-burning smart assistant into a revenue machine without the hiking subscription fee (at least for now).
Alexa+ is still new, and the ad-supported experience is actually unclear. According to Jassy, the idea is to frame ads as useful, which is what helps customers discover products that may be interested in buying.
