Tuesday, March 05, 2019

New INC Magazine Blog Post by Kaplan Institute Exec Director Howard Tullman


For Brands, Alexa May Be the Voice of Doom
Voice technology is going to be pervasive in a very short time. When it does, some marketers are going to have a very difficult time getting heard.

Executive director, Ed Kaplan Family Institute for Innovation and Tech Entrepreneurship, Illinois Institute of Technology


We thought for a while that ATM machines would cost a whole lot of tellers their jobs and, for a bumpy bit, that was probably the case. But, on net, technology allowed the large banks to vastly grow the number of branches they operated, which actually added teller jobs. There were fewer tellers per branch, but more branches.  Things were okay for a while, but now the second shoe is falling: true digital banking is exploding while the largest banks, like Wells Fargo, are closing hundreds of locations. 

 It’s true that Wells Fargo has plenty of other problems, which seem to pop up every other week. So maybe Wells, in particular, should just keep going on their march to oblivion as they continue to leap from one ugly puddle to the next. Apparently, nothing will keep Wells from regularly spending beaucoup bucks on multi-page, feel-good ad spreads in the New York Times, which couldn’t be sadder or more self-serving. But the systemic problem is much bigger than just Wells. They’re just one of many leading lenders who are shrinking their systems. 

 Whole market sectors are starting now to look like the oil rig business. When the price of oil crashed in late 2015, half the rigs were mothballed and about 400,000 jobs were lost. As the price of oil eventually recovered and the rigs were brought back on line, the sad news was that automation reduced the number of roughnecks, ginzels, and worms (nothing’s quite as picturesque as rig jargon) needed to adequately run a full platform. About half the lost jobs disappeared permanently. 

 But what automation and disruptive technologies are doing to banking, drilling and just about every other industry is nothing compared to the changes coming down the pipeline due to the accelerating adoption of voice technologies. One of the scariest aspects of this latest tech intrusion is how little discussion there has been about the unintended and unforeseen consequences and inadvertent impacts on our lives that will flow from this absolute sea change of speech. We’re all used to seeing Grandpa talking right back to the TV, but pretty soon, the TV will answer - and won’t he be surprised. 

 We are on the very cusp (and our children will never know otherwise) of the idea that instead of talking through our mobile devices to another person - essentially a communication portal - we will increasingly be talking to our devices as they become omnipresent and all-knowing oracles in our lives. It’s hard to determine even today whether our phones with all their seductive and efficient functionality save and serve us in, or enslave and tether us to, the “right now” economy. Voice is immediate and intimate - always available and readily accessible - and best suited of all the communication channels to respond to our growing need for instant answers to everything. 

While it’s hundreds of times more difficult for our devices to interpret and understand our spoken requests and instructions, especially the continuity and context between turns, it’s more than four times faster for us to talk than to text. So that’s where the boat is headed. Email isn’t even in the same ocean any more - we grudgingly open only a fraction of our emails and respond belatedly (if at all) to an even smaller number. And, as Lady Gaga says, social media has become the toilet of the internet. No salvation there any time soon.
 The world is turning to Alexa and her imitators in astonishing and accelerating numbers. Alexa devices alone will be in more than 120 million households by the end of this year and, by that time as well, distinct Alexa “skills” will swell to close to 100,000. And to date consumers are basically doing everything BUT buying products. They’re asking questions, checking news, weather and sports, listening to music and podcasts, and setting alarms and reminders. Just wait until that changes from 10% of the use cases to double or triple the number of shoppers in 100+ million homes. Alexa for your car has already been introduced by Lincoln, and Amazon itself will start shipping an inexpensive, after-market, Alexa device that will work in almost any vehicle.  

 In addition, Amazon is aggressively promoting an entire skills economy and DIY developers are rapidly moving from costly, time-consuming and challenging app development to this new lightweight, high-speed and low-friction opportunity. Few or no barriers to entry, modest if any pre-training required, and no material capital investment other than some time.  
                                  
 In fact, as a result of the compelling and addictive attributes of voice commands, the increasingly broad distribution of the speakers, and an abundance of third-party manufacturers building Alexa commands and controls into their products and services, we now expect that, by the end of 2020, more than 50% of all internet searches will be initiated by voice. 

 The most central change as voice adoption grows will be that the vast majority of voice queries are going to be answered with a single, spoken, “one-shot” response. While a featured list of 10 choices might have been an acceptable search result on a desktop  display and your phone could comfortably show you a short list of 4 or 5 replies, the fact is that - once voice really takes root - nothing more than the one “best” answer will matter or be acceptable to the consumer or to the system. We don’t want choices, we want answers - especially when we’re on the fly. 

This is bad news for brands in three key respects.

First, if creating connections to consumers online wasn’t already hard enough for brands to do (no touchy-feely in-store engagement, no pretty package promotional space), once the customer gets the hang of the voice ordering system, the instances of anything more than generic requests will continue to plummet. I want dishwasher soap or batteries, I want it now, and to a certain extent, I’m almost price-indifferent, and, to an even greater extent, I don’t care if it’s Colgate, Crest, Downy or Duracell. Especially if I’m convinced that the system will automatically default to the best available price for the product. No much room for your brand “promise” to make a difference.  

Second, while the volume of the demands to get timely and targeted messages in front of customers will only grow, the competition and the cost for being offered as the “right” answer - the product or service occupying the zero-position response slot - will grow exponentially since instead of 5 or 10 viable positions, there will only be one. All of the prior methodologies around SEO and SEM copy positioning will also need to be dramatically revised and updated because natural language voice searches are much more detailed, and the search algorithms will prioritize precise and literal descriptive and content matches. 
And finally, as the need for speed steadily grows, we’re seeing another impact of the filter bubbles that all of the basic mechanisms of search engines help to create (feeding back to us exactly what we’ve sought) and which increasingly makes new discovery or even exploration more challenging and less likely to occur. Search is optimized to efficiently deliver exactly what we’ve looked at and for in the past, not to excite, entice or encourage us to move in new directions. 

None of this is good news for new entrants or innovative offerings.  This is the system that is built to train our kids to seek and select the quick and dirty answers and it continually narrows their paths. It’s hard to imagine how they will learn to learn anything new and different if their windows on the world are painted by Google. 

And a final concern? Since your young children are about to spend several years interacting with and requesting answers, music and other services from Alexa (if they aren’t already) before they have the same transactional and conversational exposure to teachers, librarians, waiters, etc., should you start teaching them now to say “please” and “thank you” to Alexa as common courtesy and a good practice?  Or just let them develop into demanding little monsters who have never learned to be polite to anyone? 

PUBLISHED ON: MAR 5, 2019


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