- Sony reportedly reached out to Amazon several times in order to place ads in its Jeopardy Alexa skill.
- Amazon denied Sony each time, saying ads could alienate users.
- Amazon is reportedly testing several ways to tap advertising in Alexa's skills.
Ads on smart speakers is a future we are not looking forward to. It is also a future that Amazon reportedly denied Sony when the latter approached the former.
According to The Information, Sony wanted to run ads during its Jeopardy Alexa game and wanted Amazon's blessing to do so. Sony was reportedly frustrated that it could not generate revenue from the game and wanted a more direct way to do just that.
Those requests did not go Sony's way, as the online retail giant denied them every time. Amazon reportedly argued that advertising on Alexa apps, which the company calls "skills," could alienate users and push them to play Jeopardy less on an Echo device.
To be clear, developers have two ways of making money with Alexa skills. The first route is the more obvious one: have people purchase products. For example, Pizza Hut and Domino's Pizza let you order pizza through Alexa.
The second route is creating subscriptions with additional functionality. The Jeopardy skill, for example, allows folks to pay $2 each month for extra questions. We are not sure how many people actually cough up the dough for that, but the option is there.
We can somewhat understand Sony's frustration here. The company, along with numerous other brands, have paid attention to the rise of Alexa's clout. These companies do not want to be left out of the platform, but they do not have many options in terms of generating revenue.
At the same time, ads on smart speakers could be the death knell for some users. Speaking is the only interface for these speakers, and there is nothing unobtrusive about stopping in the middle of a sentence to talk about a product on sale.
That is not to say Amazon is not testing ways to build an advertising business. According to CNBC, the company is reportedly letting companies target users based on past shopping behavior.
Amazon is also reportedly looking into advertising in Alexa's skills and sponsorships on Alexa. For example, someone trying to clean up a spill might be pushed to buy from a specific brand.
An Amazon spokesperson told CNBC that the company has no plans to add advertisements to Alexa. However, with pressure seemingly mounting, do not be surprised if the company turns around and says something different down the road.
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