Voice And The Pay Per Transaction Model
In my one of the previous articles ‘Customer Experience 2020: Mobile, Voice, Social and Contextual’, I emphasized on the emerging importance of ‘Voice’ search. With the success of Amazon Echo and Google Home, we have now entered in the era of Voice Search. While Pay Per Impression and Pay Per Click models are not translating the desired results, the performance of PPC (Pay Per Call — launched for mobile devices by Google in 2015) is also debatable.. The user has to wonder if the top delivered results are truly the best one or from the advertisers who paid the most. Keeping this in mind, Google the market leader and most likely all of the other players in the space are seriously considering Pay Per Transaction (PPT) transaction model; which seems to be the biggest shift in the digital space (advertising) in the years to come.
With limited budgets, many advertisers may not understand the most effective method of advertising. With performance based advertising models, they can avoid the risk of paying large amounts for advertisings that are effective and only pay for results. The advertising/media agency, publisher assumes the risk and ensures that the advertisement is well-targeted, making best use of the available inventory of advertising space. Digital media publishers used to choose advertisements based on location, time of the day, day of the week, demographics with performance history to ensure that they maximize revenue earned from each advertising slot. While deciding on various models like CPC, PPC, CPM, CPA and CPD, the close attention to targeting was intended to minimize the number of irrelevant advertisements presented to the consumers. Consumers often grumble that advertisements are irritating but in many situations they find advertisements useful if they have context and relevance. Today’s marketers are measuring the performance of every penny they spend in advertisements and are looking for the right ROI which is now getting related to a transaction or a sale.
Pay Per Transaction makes more sense for many reasons keeping the above in mind. First of all it eliminates the friction between advertisers and content consumption that we are currently witnessing on the web. It will eliminate the need for ad-blocking, in fact consumers will be actively seeking out the brands they wish to purchase from. The potential of successful sale is much greater with this Pay Per Transaction model. Google (and others as well) are mostly likely to eye higher revenue through PPT model than they would earn from the Pay Per Click (PPC) model. Going further when it will tie fees to the actual value of the transaction, it it would mean a significant jump in digital advertising revenue.
Currently such a system (transactional payment) doesn’t exist but this is something that need to be built from the ground which will involve multiple stakeholders like Google, other search engines, the advertisers and the payment processors to establish this approach. Let us understand how this may work. Every time the user uses Google Assistant to order something from a store, the brand/store benefitting from the sale would pay a transaction fee to Google. Or I may ask what the weather will be like in New Delhi next week and the assistant will give me the information I am seeking with a follow up asking me if I would like to book a flight, a cab to the airport and a hotel in which Google, obviously would get commission. Google’s thought process was hinted at a interview last year given by it’s CEO Sundar Pichai, where he said, “The Assistant team talked about conversational actions as a way by which we can integrate third parties into the Voice experience. I think we will evolve it a lot in the coming years.”
Although Pichai didn’t spell out what kind of third party integration would be involved, but Sridhar Ramaswamy, SVP of Advertising and Commerce mentioned in one of his interviews that — Google is keeping an open mind about the kind of monetization opportunity which can range from being purely transactional — making it convenient for the user to fulfill a transaction with Google Assistance or/and can involve a promotion. But its certain that the days of three top text ads followed by 10 organic search results are a thing of the past in the voice driven world.
The Voice Landscape is encouraging the PPT model:
While Google is dominating when it comes to online advertising revenue, but it is vulnerable as the ecosystem is entering into the world of voice-search. Most likely, its strongest competition for monetizing search will come not from its current rival Microsoft, but from Apple and Amazon. Let us get into what the peers are up to.
Apple: Like the wearable, after contemplating the idea of launching its wearable, Apple launched iWatch. Similarly, for a long time Apple appeared to have rejected the idea of monetization of voice search. But the developments in recent months shows that the thinking is getting changed. Last summer, Apple opened up Siri to third party developers through API that would allow apps to activate from Siri’s voice commands. As per a Bloomberg story, its testing prototypes of its own voice activated smart home device with Siri at its core, like Amazon Echo. It will be interesting to see how Apple ties its plan to monetize voice search in the coming time.
Amazon: Amazon is without doubt the world’s biggest online marketplace. It has existing strong connections to hundreds of thousands of retailers and customers. The most important, it possesses valuable information in the form of purchase history, payments and shipping details. And this is where Google should be worried about Amazon as it’s strongest competition. Alexa from Amazon was out in the market two years before Google Home made its debut in the market, hence it has more search history to work from. And its not a stretch believe that Amazon is opening up its payments platform soon to third party developers in a bid to monetize via the Pay Per Transaction (PPT) model.
While Google understands what people are searching, Amazon is tracking what people are buying.
Microsoft: Microsoft is adapting fast to the market dynamics. According to Windows Central, its building Home Hub, a competitor to compete against Google Home and Amazon Echo. Its planning to integrate Home Hub into Windows 10 and be accessible even from a locked screen. Expected to be launched this year, the key point of difference is that it would allow use of not just voice via Cortana, but also through screen, touch sensors and pen. From the advertising point, the always available screen will mean more possibilities for the digital real estate. And Microsoft’s ambitions with Home Hub is far beyond just competing with Amazon and Google.
Samsung: The original creator of Siri, Dag Kittlaus and group of other engineers have left Apple and created Viv, a new hybrid artificial intelligence system that was acquired by Samsung last year (December 2016), after a desperate bidding war that included Facebook and Google. This is a system built to monetize voice search and is being considered as the dark horse in the game. Seems like Samsung is having a market winner in Viv, first its interconnected nature while others like Siri is only allowing multiple silos of information across apps and services to start talking to one another and become links in a user’s command chain. This will allow more conversational and complex queries that more closely resemble how people actually talk. The second USP of Viv is its programmatic nature of back-end system. Utilizing breakthrough in program synthesis, Viv’s AI is capable of writing it’s own code to accomplish new tasks. Although this is not new in the AI ecosystem, termed as software that builds itself. As per Dag Kittlaus, this dynamic program generation allows Viv to understand the intent of the user and to create programs to handle tasks on the fly, even it hears a task for the first time; and as per him Siri was the only beginning. Samsung has added the most secured payments systems to its recently launched Galaxy S8 smart phones and with Viv integrated, the future looks very promising for the Korean smartphone giant.
While Apple, Amazon, Facebook and Google are boiling the frog on the concept of AI as the core operating system and devices, Samsung is gearing up to go full throttle that is more about voice powered interface which remains the same across all of its devices, from phones to home hubs to doorknobs to refrigerators to smart television sets. And this will catapult Samsung into very very small group of businesses that are vying to use AI as a way to acquire and retain customers.
The digital advertising landscape is going through a major change that will redefine the overall marketing landscape which to highly influenced and driven by martech (marketing-technology) and will help brand owners to demand and command maximum ROI from each penny they spend while advertising. And Pay Per Transaction seems like inevitable model to determine ROI.
Twitter: Aroon Kumar
