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Home Digital Marketing

More than 200 million smart speakers have been sold, why aren’t they a marketing channel?

February 15, 2020
in Digital Marketing
More than 200 million smart speakers have been sold, why aren’t they a marketing channel?
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Smart speaker sales reached 147 million units globally in 2019, reflecting 70% growth over 2018, according to new data from Strategy Analytics. The firm said that Amazon retained the market share crown with 26.2%, down from 33.7% in 2018. That was followed by Google with 20.3%, which was down from 26% last year. 

Google number 2, Apple number 6. Google was followed by three Chinese makers and finally Apple, in sixth place with a share of just under 5% (4.7%). Notwithstanding growing privacy concerns, device shipments in Q4 reached 55.7 million units, which Strategy Analytics said was a quarterly record. Google also saw a recovery in shipments and sales in Q4. 

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Numbers all over the place. Another analyst firm, Canalys, predicted earlier this year that the smart speaker market would reach 150 million units globally in 2020. Consumer Intelligence Research Partners previously estimated (in August) that the size of the U.S. smart speaker market was just under 80 million units. However, in January, Edison research said the installed base of smart speakers in the U.S. market was nearly 160 million units, which is extrapolated from survey data and probably too high as a result.

It’s safe to say that at least 200 million smart speakers and displays have been sold around the world as of the end of last year. Regardless of the precise number, there are a lot of these devices in people’s homes.

Source: NPR and Edison Research (2020)

The big mystery. With such a large and still-growing base, the mystery is: why are we not seeing smart speakers and displays develop as a marketing channel? Some might invoke the cliche “early days.” But that doesn’t really explain it.

Amazon introduced the Echo in 2014, almost six years ago. In early 2019, the company announced more than 100 million Alexa-powered devices had been sold. And there are now more than 100,000 Alexa skills — with no breakout hits.

We have seen no usage data from the platforms, no third party PR and no behavioral data from any brands (e.g., Walmart) to give us much insight into actual usage. We have a ton of surveys that say smart speakers are being used for search and commerce. But we don’t know how well the surveys actually correspond to behavior.

Smart displays and smart speakers are different devices, even though they’re both voice-controlled. Smart displays with touchscreens have all the search and commerce options available to them that tablets do, but this isn’t where the volume in the market is. Most of the device sales have been of low-priced units like the Echo Dot and Google Home Mini, without screens.

The potential monetization scenarios. Looking only at the screenless devices, there would appear to be a number of potential scenarios for marketing and potential monetization:

  • Audio advertising (lots of options here)
  • Reordering (e.g., Walmart groceries), which could extend to other loyalty scenarios: my usual food order from delivery service or favorite restaurant, etc.
  • Reservations/booking (this would probably also require a signed-in loyalty relationship)

In terms of indirect monetization, there are obvious local search use cases and other commercial lookups that could drive offline conversions but don’t involve direct advertising. And then there are various hybrid device use cases in which a lookup starts on a phone or a PC and is completed via voice on a smart speaker or vice versa.

One could envision a range of uses to support or enhance the customer experience (e.g., Marriott putting Alexa devices in hotel rooms). And we could also imagine voice apps/skills on these devices that support and build brand awareness. But most of these things that I’m talking about haven’t happened or aren’t happening with any degree of success.

Why we care. Is it caution? Is it a lack of vision and creativity? It’s mysterious why we’re not seeing any good data or case studies or PR around any of this — other than device sales. Marketers and brands are likely aware that they need to create voice/smart speaker experiences that aren’t purely about novelty and actually do something useful. Perhaps that’s holding many of them back.

But there’s a major opportunity here that’s not being developed, and it’s not entirely clear why.



About The Author

Greg Sterling is a Contributing Editor to Search Engine Land, a member of the programming team for SMX events and the VP, Market Insights at Uberall.


Credit: MarTech Today By Greg Sterling

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