Google Tests Waters of Voice Ads on Speaker
March 16 2017 - 8:53PM
Dow Jones News
By Jack Nicas
Google's smart home speakers on Thursday played an unprompted
promotion for Walt Disney Co.'s new "Beauty and the Beast" movie,
the first sign of how the world's largest advertising company could
shoehorn ads into its growing number of voice interactions with
users.
Users of Google's voice-controlled speaker, called Google Home,
heard a 17-second promotion for the movie, after asking the devices
about the their schedule. "By the way, Disney's live-action Beauty
and the Beast opens today," the device said, according to user
videos. After mentioning a detail about the movie, it said, "For
some more movie fun, ask me to tell you something about Belle," a
main character in the film.
The promotion, which appeared to be Google's first attempt to
test advertising on Google Home, reflects a new balancing act
between monetizing new search formats and users' tolerance for more
ads. The promotion was also read aloud on some smartphones that run
Google Assistant, the company's digital-assistant technology that
also underpins its speakers.
Joseph Vorbeck, a 32-year-old web developer in New York City,
said he wasn't pleased to hear the Disney promotion after his
Google Home told him the weather and his schedule for the day. "It
was kind of jarring," he said. Advertising on the device "would
really ruin the experience for me."
Google, a unit of Alphabet Inc., said the promotion was a
partnership with Disney, not an ad. Riffing on lyrics from Disney's
1991 animated version, Google said, "This isn't an ad; the beauty
in the Assistant is that it invites our partners to be our guest
and share their tales."
Disney didn't pay Google for the promotion, a person with
knowledge of the deal confirmed, though it was done with the
Hollywood studio's approval.
Google could use the "Beauty and the Beast" promotion as a
proof-of-concept to try to sell companies on using Home as an
advertising platform in the future.
Google built its massive advertising business by displaying ads
alongside its search results. Those search ads have been successful
in part because they are relevant to users' interests and discreet
-- users can scroll past them if not interested.
But voice interactions don't allow for such subtle advertising.
Promotions can be slipped into conversations quietly, such as
product placements, without being labeled as ads, but Google has
long been careful about labeling advertising.
Since Google unveiled Google Home and Google Assistant last
year, industry analysts have wondered how Google plans to monetize
the products, which can also run on smartphones. Both products
serve similar functions as Google's search engine -- finding users
information and answers -- and could cannibalize its main
moneymaker, unless Google finds a way to sell ads on them.
The company's approach has long been to make products useful and
popular before profitable. "If they find them useful and they use
it at scale then we'll figure out a way" to monetize the products,
Google's search chief John Giannandrea said shortly after the
products were announced.
John Mason-Smith, a 29-year-old business-software salesman in
Virginia Beach, said he loves his Google Home, but ads on it would
feel intrusive. "When your only interaction with the device is via
voice, when you put an ad in the middle of that, it's like someone
interrupted your conversation to do an unprompted sales pitch," he
said. "It's a protected space they're violating."
The company later Thursday updated its statement, saying that
the promotion was part of a feature that calls out "timely
content," such as a holiday, after telling users about the day
ahead. "We're continuing to experiment with new ways to surface
unique content for users and we could have done better in this
case," Google said. By Thursday afternoon, it had removed the
promotion.
--Ben Fritz contributed to this article.
Write to Jack Nicas at jack.nicas@wsj.com
(END) Dow Jones Newswires
March 16, 2017 20:38 ET (00:38 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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