Marketers Are Racing to Reach Rapidly Growing Audiences on Amazon’s Alexa and Google Home

But some pricey IoT gadgets are lagging behind

Owlet helps parents track their children’s health Owlet
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As brands increasingly seek to understand the Internet of Things, marketers are keying in on how Amazon and Google will dominate connected devices in 2018. That’s why Amazon’s Alexa and the Google Home—with their rapidly expanding sets of AI skills and services—will be completely unavoidable for the 180,000 expected attendees at this week’s annual Consumer Electronics Show in Las Vegas.

“It’s only been a year since Alexa got introduced to the market, and I have not seen the pace of acceleration so fast in terms of the adoption and people getting accustomed to it,” said Steven Moy, evp and chief technology officer for the U.S. at R/GA. According to data from Consumer Intelligence Research Partners (neither company reports sales numbers publicly), Alexa and Google Home have sold 27 million devices in the U.S.

The result of voice assistants’ exploding popularity is a new gold rush to build branded skills “similar to the rush to build apps when the iPhone first came out and the App Store launched,” said Jeff Malmad, managing director of Mindshare North America’s Life+. And similarly now smartphones control how consumers access voice skills. “The ultimate device and gateway to the Internet of Things happens to still be your mobile phone today.”

LG Electronics’ ThinQ speaker uses artificial intelligence to activate appliances by saying commands like “turn on air purifier.”

Moy’s and Malmad’s agencies, as well as several others, noted they will have a big presence at CES to show how their companies are helping brands conquer Alexa and Google Home.

“Because Alexa has gotten such traction, [brands] are saying, ‘How do I bring voice to my experiences? How do I bring conversational interfaces to existing products?’” said David Hewitt, vp and global mobility lead at SapientRazorfish. “We’re seeing the enterprise-class investments starting to be made that allows brands and companies to think about configuring and scaling a lot more [IOT] services.”

At CES, Amazon will host nine presentations and workshops over two days that dive into the nuts of bolts of Alexa, including specific sessions about connected automobiles and another session dubbed “Amazon’s Quest for Alexa to Be Everywhere.” Meanwhile, Google will reportedly make its biggest push at the trade show since 2015 with a stand-alone booth that demonstrates its products, including its virtual assistant Google Home. Elsewhere, LG will show off a new, souped-up smart speaker dubbed ThinQ that plugs into both Alexa and Google Home.

Are consumers adopting pricey IoT gadgets?

While consumers are embracing the skills brands have built for voice assistants, consumers haven’t gone wild yet for futuristic appliances like the $2,600 connected refrigerator or $120 alarm clocks that emit the smell of coffee and music to wake you up.

“Every year at CES, you’ve been seeing the connected refrigerator going back years, but nobody has them in their house,” Malmad said. “In the near future, you’re going to start to see that shift to a connected fridge being more common than not as the price comes down, screens become less expensive and consumers are used to these voice-connected speakers—it’s just going to be as common as having a rear-view camera in your car when you’re reversing.”

Samsung’s souped-up fridges come with a 21.5-inch touchscreen that connects to a platform called Family Hub, which lets users create shopping lists, stream music and watch TV.

Another thing that consumers aren’t buying: watches and health-tracking wearables from startups and smaller companies. Jawbone, for instance, has historically had a large presence at CES with hands-on demonstrations of its products, but the company went out of business in July.

“You’re starting to see the true winners in the world of wearables and that has pretty much defaulted to the world of Apple Watch as well as Android Wear and Samsung,” Malmad said.

Still, marketers such as L’Oréal, Pernod Ricard and Owlet—a startup that makes baby socks embedded with technology to track health information—see an opportunity to try their own hand at making IoT devices.

For $300, parents can track their babies’ oxygen and heart information with these socks that feed real-time stats to an app.

The key is to provide utility, said R/GA’s Moy, who worked with Owlet as part of R/GA Ventures, which pairs startups with the agency. The agency created the $300 connected socks to let parents track a baby’s oxygen and heart levels with a mobile app.

“We have a framework to look at innovation: ‘Are you adding value to the daily life?’” Moy said. “We also believe [there has to] be a business component—it’s got to be sustainable and meaningful and not a one-off.”

SharpEnd—a London-based agency that specializes in IoT—takes the same mentality when creating campaigns for Pernod Ricard, Unilever and Estée Lauder. For Pernod Ricard-owned Malibu, the brand prototyped a handful of cups at the Ibiza Rocks Hotel with sensors that allow patrons to send their location to a bartender and request a new drink by simply twisting the base of the cup.

Expect brands to follow Malibu’s lead as they create more experiences instead of using traditional advertising to break through with consumers, said Cameron Worth, SharpEnd founder.

“The brands who advertise less in the future are going to be the ones that are more valuable,” he said. “If you can plug all these forms of technology into your products, then there’s a real opportunity to reposition your brand as one that’s about utility versus entertainment.”

This story first appeared in the Jan. 8, 2018, issue of Adweek magazine. Click here to subscribe.
@laurenjohnson Lauren Johnson is a senior technology editor for Adweek, where she specializes in covering mobile, social platforms and emerging tech.