As another fiscal quarter wraps up, it’s the moment for another earnings call featuring fresh strategies aimed at enhancing revenue. This time, Amazon CEO Andy Jassy updated shareholders on Thursday about a “notable financial opportunity” in advertising through Alexa+, the company’s latest AI-driven voice assistant.
“I believe that over time, opportunities will emerge, you know, as individuals engage in more multi-turn conversations to allow advertising to play a part — aiding people in discovery and serving as a lever to boost revenue,” Jassy remarked, according to the transcript from the investor call.
Since its debut earlier this year, Alexa+ has reportedly gained millions of users. In contrast to the original Alexa, which mainly controls lights and sets timers, Alexa+ is crafted to be more conversational, contextually aware, and powered by AI. It can assist in planning your date night, entertain your children, and even engage in basic image and video generation — all included in your $14.99/month Prime subscription.
Nonetheless, Amazon Alexa has remained free of ads until now. It is also over a decade old and not generating revenue, which has led some within the company to label it a “massive failure.”
Amazon is not the only entity looking for ways to monetize AI. Both Google and OpenAI have investigated ad integration in their AI offerings to create revenue streams. OpenAI CEO Sam Altman, who previously opposed advertising in his chatbot, has since changed his stance, potentially allowing ads in upcoming versions of ChatGPT.
The introduction of ads in Alexa+ would represent a significant change in user experience and Amazon’s strategy, particularly in light of the assistant’s history of being expensive to maintain and challenging to monetize. An ad-supported Alexa+ could signify Amazon’s effort to convert its previously unprofitable smart assistant into a source of revenue, without raising the subscription price (at least for the time being).
Alexa+ is still in its infancy, and what an ad-supported experience would genuinely involve remains uncertain. According to Jassy, the aim is to present ads as beneficial, helping customers discover products they may be inclined to purchase.