Google Assistant, the search giant’s answer to Apple’s Siri and Amazon’s Alexa, will make money from e-commerce, according to Google ads chief Sridhar Ramaswamy.
The revenue model for Google’s AI service, which lives on devices like Home and smartphones like Pixel, had remained unclear until now. Apple’s main revenue source, the iPhone, clearly benefits from its AI platform, while Amazon’s Alexa technology is designed to stoke more buying on Amazon.
Earlier this year, a promotion that played on Google’s Home devices gave a clue to how ads might work. Google said the promotion, for the Disney film “Beauty and the Beast,” wasn’t a paid spot, just an experiment.
“Promotion is only one aspect,” said Ramaswamy, Google’s senior vice president of ads and commerce, at the Google Marketing Next conference in San Francisco on Tuesday. “More transactional than ads is how I would think about it right now.”
He mentioned the option to purchase items from select partners through Assistant, a feature added in February, as an example of Google’s approach to making money with Assistant. Google would likely take a cut of each sale, essentially the equivalent of an affiliate fee.
Even so, making money off Assistant is not the priority right now. “We are very focused on getting consumer experience right first,” Ramaswamy said.
Google will have to be aggressive and creative with its approach to transactions with Assistant if the company wants to hold a candle to Amazon’s Alexa-powered devices like Echo, Dot and now Show, which give shoppers quick and easy access to the company’s expansive inventory.
But it still appears that there will be ads on Google Assistant.
Google’s director of product management, Jennifer Liu, pitched Assistant to marketers during the keynote at the conference, inviting them to send data to the tech giant for inclusion in Assistant results.
She previewed a coming feature for Assistant where consumers will be able to ask for locations that sell specific items. In the presentation, Liu asked Assistant where she could find a particular toy brand, called Snap Circuits, for her children.
In ads in traditional Search, local businesses have to pay to show up in results when consumers are searching for a specific item; for instance, “Okay Google, where is the nearest place where I can buy Advil?”
Update: Google says it is not charging marketers to use the inventory search option coming to Assistant, and is calling it a shopping feature. In traditional Search, marketers pay for an ad feature that similarly shares results for nearby sellers that have in stock the item a user is seeking. The feature that is coming to Assistant pulls from the same data as the ad option already offered in traditional Search.
This feature for finding specific items nearby is different from asking Assistant the location of a specific store nearby; for example: “Okay Google, where is the nearest CVS?” That option is already available on Assistant, and businesses are not charged for inclusion.
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