Last month I met General Jim Mattis at the LIFT Summit where he told his story of why there is “No Better Friend and No Worse Enemy,” than a U.S. Marine. I’d like to share why his famous saying applies equally well to Voice Assistants and Conversational AI for Broadcasters.
The Killer App for Voice
First, it is clear that playing audio content is the killer app for smart speakers. These are devices tailor-made to deliver high quality audio experiences that can be called up instantly with a spoken phrase from across the room. Data from Edison Research, Voicebot, and others all report that listening to streaming music, radio, and other forms of audio content all rank in the top 6-7 use cases for smart speaker users. At XAPPmedia, we see this every day in data from over 1,000 radio stations and more than 100 podcasts.
Smart speakers have “brought radio back into the home” as we first started seeing back in 2016. However, it is important to recognize that voice interfaces are elevating audio in general as a media of choice in places well beyond the smart speaker including wearables and vehicles. And, data show that audio listening through smart speakers in particular and voice assistants more broadly is largely accretive. This will soon be true across a number of devices and settings.
The Conversational Trend
This is good news for broadcasters which are the most experienced audio producers and have the most audio content to distribute. The trendlines are also favorable. As consumers employ voice assistants more frequently, the most convenient response is typically audio content or sometimes audio married to visual content. Simple images and text do not rule in this new medium. The digital versions of our analog media deliver the most pleasing consumer experiences.
Considering these trends, we predict that all content interfaces will soon be conversational. Why? Because consumers crave convenience and conversational interfaces give them the ability to simply “ask and get” whatever content they want. Speaking a request is the easiest and most robust interface for media discovery and retrieval. Voice is especially relevant for TV broadcasters in the living room and for radio broadcasters in the car. The smart speaker was a wake-up call for the industry and is the canary in the coal mine illuminating what is coming next. It’s both a timely trend and a big opportunity for the entire broadcast industry.
Habits are the Virtual Pre-set Buttons of Voice
Voice is the easiest and most convenient method ever devised to access media content and that means all forms of content will be competing for consumers’ attention. Voice offers consumers access to virtually infinite content choices that will compete heavily with broadcasters. But, consumers are creatures of habit and those habits are the virtual pre-set buttons of voice. Choice is a funny thing — the more choices we have, the more likely we are to go back to the three or four habitual choices that are burnt into our brains (i.e., virtual pre-set buttons).
Broadcasters are in perfect position to take advantage of these primal consumer behaviors while the majority of consumption is still over the air and their brands remain strong. Forward thinking radio broadcasters recognized this early on with smart speakers and they created branded Alexa skills for their stations (e.g., 95-5 NASH Icon from Cumulus) and they regularly promoted the skills on-air to influence consumer habits. That presence and promotion is paying off with a rising portion of all digital listening now happening on smart speakers.
With the auto industry moving aggressively to bring Alexa and Google Assistant into vehicles — broadcast radio’s key remaining stronghold — it’s time for radio broadcasters to double down on voice presence and on-air promotion. A branded voice presence for broadcasters of their linear and on-demand content combined with promotion of those brands on-air non-stop will form the habits to make voice your best friend. Hesitate and you will be lost in a sea of competition and voice assistants will soon become your worst enemy by helping consumers form new habits without you in the loop..
The Advertising Hammerlock Yields a Digital Onramp
Television advertising market share has declined 21% and radio 41% since 2007 while digital advertising market share has risen 550% over the same period. Most of these ever-expanding digital advertising dollars are going to two players—Google and Facebook with some recent inroads made by Amazon. This is driven by increased consumer time with digital media and the ease at which advertisers can buy and measure the effectiveness of digital inventory. While this has undermined advertising revenue for traditional broadcast media, voice assistants are providing a real opportunity to reverse the recent market share trends.
On one level, voice assistants are adding another tool for the tech giants to exert control over the advertising ecosystem and all customer relationships. They are intermediaries that interpret consumer desires and deliver them content. That could be content from broadcasters or from other sources, potentially controlled by the same companies that provide the voice assistants.
However, the most popular voice assistant platforms, Amazon Alexa and Google Assistant, both offer the opportunity for television and radio broadcasters to connect directly with consumers. And, despite the fact that these assistants are gatekeepers, they also allow traditional broadcast advertising models to operate unfettered by rules that limit these options for non-media Alexa skills and and Google Actions.
The web introduced new content that displaced consumer time from broadcast media and mobile favored aggregators over discrete content producers. Voice assistants are bringing back those direct connections and enabling traditional media to become interactive for the first time.
The implications for advertising are profound. Voice interactive advertising is the “native advertising format of audio and video.” When someone speaks to us, we naturally answer verbally. The same is true when we hear a call-to-action. It is natural to respond by voice. The on-air promotion of Alexa skills and Google actions is the first step in establishing your voice interactive advertising foundation. Broadcasters need to embrace this approach in order to increase consumption and form consumer habits. This foundation then extends into an entirely new way for advertisers to connect directly with consumers and provide those interactive options to advertisers for a premium.
Risk of Inaction and Plenty of Rewards
Voice transforms audio and video media the same way the Web transformed print – it makes it interactive and measurable. At the same time, voice assistants bring more competition than ever into the car, the living room, and everywhere else consumers seek out their content.
Broadcasters that embrace voice aggressively will be winners and those that take a wait and see approach to voice will be losers further ceding ground to digital native media that seeks to devour all advertising revenue. “No better friend and No worse enemy.” The opportunity with voice is a choice. You can embrace voice now with presence, promotion, and monetization or watch while others, including the tech giants themselves, aggregate audience through this popular new channel.
The good news is that you don’t have to go into this blindly. Thousands of radio stations are already available, directly through voice assistants, and some are experimenting with new advertising models that can deliver premium formats and attractive margins. Our objective at XAPPmedia is to help broadcasters and their advertisers take advantage of this shift. We have the experience, tools, and relationships with the platforms to help you take maximum advantage of the opportunity while avoiding the risks.
I will be speaking at the NAB Show in New York later this week on this topic in more detail and hope to see some of you there. For everyone else, if you would like more information about the presentation or about how broadcasters are managing this transition, please fill out the form below and a voice media strategist will connect with you.