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Image credit: Nicole Lee / Engadget

For Amazon, better skills mean bigger ad revenue

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Nicole Lee / Engadget

Amazon is improving its Alexa voice assistant with each new update, enabling more natural conversation patterns and upgrading the system's ability to understand complex or vague questions. All of this is great for people who are sick of screaming, "ALEXA," and repeating commands a dozen different ways before the device actually does what it's supposed to. However, these upgrades are also good for advertisers -- and, by association, Amazon.

Amazon hasn't laid out a clear, public plan for Alexa-enabled ads, but the company showed off the future of voice-assisted product placement during its event on Thursday. Head of all things Alexa, David Limp, explained that Amazon's voice assistant sometimes doesn't have the answer itself, but one of its skills (connected apps) might.

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Amazon engineers are working to redirect users to relevant skills when they pose certain questions, such as, "How do I get a stain out of a shirt?" In that case, Alexa will pull up the Tide skill, which can then offer a solution invariably involving some type of Tide product.

The business plan from here is clear: Companies pay a premium to be activated when users pose questions related to their products and services. "How do you cook an egg?" could pull up a Food Network tutorial; "How far is Morocco?" could enable the Expedia app; "Where do babies come from?" could activate a response from Viagra (assuming the little blue pill becomes an Alexa skill one day).

Amazon is pitching this upgrade as a consumer-focused feature, but like most things in the tech world, it's really all about ad revenue. The company has kept advertising to a minimum on Alexa devices so far, historically banning skills that contain commercials for third-party services. However, it looks like Amazon's Alexa-advertising tune is changing this year.

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CNBC reported in January that Amazon has been talking with major companies, including Procter & Gamble and Clorox, about paying for higher placement in Alexa searches. At the time, Amazon denied it was working on Alexa advertisements, but there's a clear line from the January report to this week's media event. Procter & Gamble happens to own Tide, the company that Limp used as an example of Alexa's evolving language algorithms.

"Alexa, is that a coincidence?" It's not, and we don't need an Echo Dot to answer that for us.

The reveal of this function signals Amazon's entry into voice-assisted advertising. Ads on Alexa-enabled devices might be hard to spot, at first -- they won't look like online banner ads or sound like radio commercials. They'll be integrated into Alexa itself, as Amazon continues to work on making the system sound more natural and conversational. They'll be presented as features -- clear examples of Alexa's ability to recognize context and offer solutions relevant to you, the unwitting consumer. Whatever form they finally take, they won't be presented as ads.

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They will be everywhere, though. Amazon is pushing to get Alexa in every device in your home, adding voice assistance -- and, therefore, ads -- to everything from wall clocks to power outlets and even microwaves.

Amazon talked about a lot of new Alexa features during its event, including the system's ability to recognize when someone is speaking softly and respond in kind. So, one day in the near future you'll be able to quietly ask your AmazonBasics Microwave, "Alexa, how do I stop my baby from crying?" and hear its whispered response, "Clorox offers a wide range of solutions for infant care."

Follow all the latest news from Amazon's Alexa event here!

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