New Canadian-specific research from eMarketer this week revealed the size of the smart speaker market. Among the key takeaways:
- By 2020, eMarketer expects 6.7 million Canadians—17.9% of the population—will use a smart speaker at least once a month;
- Google Home is by far the most popular device on the market, owned by 55% of all smart speaker owners (followed by the Amazon Echo at 22%);
- Growth drivers for the device are similar to the US, with people becoming more comfortable with using voice assistants and seeing the benefits of voice versus screen. Oh, and they make a great gift.
But what are the implications of the growing smart speaker market for advertisers? Paul Briggs, eMarketer’s senior analyst covering the Canadian market, provides some answers.
Marketers need to think about their voice search strategy: “The nature of search is changing, slightly, to be more voice centric,” said Briggs. “People are asking questions to their smart speakers, which is different from a text-based search.” While a text-based search might encompass one to three words, a voice search could be between four and six words. “That changes how the search engine receives information and how it presents findings. It’s really about expanding search strategy, search engine optimization and management.”
What about paid promotion? Paid advertising on smart speakers remains very much in its infancy in terms of what is available from companies like Google and Amazon. Tests in the space, said Briggs, have yielded “not-great results.” That’s not surprising he says, since it’s a “much more invasive” ad unit. “There is potential for solid paid promotion, but a lot of testing still needs to be done.” Before jumping in, companies need to better understand consumer sentiment around these types of ads and work to create a more natural interaction with the consumer. “How that takes shape is still to be determined.”
E-commerce an opportunity: While typical smart speaker use focuses on asking for weather, news, etc., shopping is growing in popularity, said Briggs. According to the 2018 Canadian E-commerce Monitor from Ayima and Insights West, 42% of Canada’s smart speaker/voice assistant owners purchased online, and 16% of them were regular buyers. That could give Amazon, with its vast retail operation, a significant leg-up on its rivals when it comes to monetizing home speakers. “It’s a natural advantage the Amazon ecosystem would have over its competitors,” said Briggs, who predicts that orders will be for standard, repeatable household items (paper towel, toilet tissue, coffee etc.) rather than big-ticket items such as flatscreen TVs.
Privacy legislation tends to impact consumer adoption: In countries where privacy regulation is strong—such as Europe under the new GDPR—smart speaker adoption is greater, because consumers are comfortable that they’re being protected from spying, data collection, etc. It’s a similar situation in Canada, where the Digital Privacy Act’s mandatory data breach response requirements took effect in November. “It gives comfort to consumers that their privacy is being protected,” said Briggs. -Chris Powell