Recently, I blogged about the obvious slowdown in smart speaker growth. We saw the trend take shape in last year's Techsurveys, especially among commercial radio fans. Our new Techsurvey 2022 is in the field as I write this post. We'll be watching the trends on smart speaker acquisition, usage, and other key metrics very closely. Clearly, things are slowing down with this platform, and it's important to understand why it's happening.
For radio broadcasters, this trend is especially worrisome. That's because almost every broadcast radio station is easily accessible on smart speakers. And during COVID, millions discovered they could listen to their favorite radio station at home – even if they don't own a “regular radio.”
In our research among more than 40,000 core radio listeners in 2021, we learned that listening to a terrestrial radio station on Amazon, Google Home, and similar devices is becoming a prime “use case.” Yes, consumers are still asking Alexa for the weather, to convert kilometers to miles, and to listen to Pandora and Spotify. But more and more, they're using smart speakers to tune in a favorite radio station.
You can see evidence of this in the chart below. I pulled up the results from Public Radio Techsurvey 2021. We asked smart speaker owners whether they've been listening to more, less, or the same amount of AM/FM radio since they acquired a smart speaker. A +15% net “listening more” percentage is impressive, and it underscores the increasing value of these gadgets to radio broadcasters.
In a post last month – “Why Stalled Out Smart Speaker Sales Will Hurt Radio Broadcasters” – I addressed the slowdown in smart speaker ownership. When we ask consumers who don't own one of these devices, privacy is a key factor. As we continually hear in focus groups, anti-Alexa consumers often say, “I'm not about to bring a device into my house that listens to my conversations.”
Now it turns out Amazon has seen this very same phenomenon in their research. Privacy is, in fact, a barrier to buying a smart speaker. But now, they're discovering a speed bump among current owners of these devices.
A story by Bloomberg's Priya Anand sums it up with this headline:
According to Anand, internal memos from the Amazon camp detail how the company is trying to keep Alexa owners engaged. They indicate – as our research also shows – the initial growth phase is stalled out. The estimate is only about a 1% growth rate over the next few years.
Whether you're a radio company or the world's largest online retailer, this is not an acceptable increase for a platform that planners hoped would become mass market.
Not surprisingly, Amazon disputes the way Bloomberg reads these documents. A spokesperson for the massive retailer pushed back at the notion that Amazon Echo products are slowing down:
“The fact is that Alexa continues to grow—we see increases in customer usage, and Alexa is used in more households around the world than ever before.”
Maybe, but there's no denying a level of product fatigue. For many users, the magic has worn off. Bloomberg's Anand asserts that beyond the privacy issues and a series of PR screwups, Amazon's problem is more basic:
“People simply don't find Alexa that useful.”
Part of the problem is that beyond basics like listening to music or setting the timer, “new Alexa users discover half of the features they will ever use within three hours of activating the device.”
Think about that. Anand points out that Amazon is working on motivating owners to interact differently with these devices, including Alexa Auto.
But a document from 2019 indicates that little progress has been made in expanding “use cases.”
You have to wonder how many Alexa's are sitting in closets or in junk drawers.
Obviously for Amazon, this is a conundrum – how to make these devices part of people's routines – things they do every day out of habit.
I may have just the thing – a partnership with radio.
Now before you laugh me off, walk with me for a minute, and let's think about the possibilities. We know from our experience and our research that a lot of radio listeners tune in their favorite stations out of habit.
In this case, this means radio is part of their daily routines. Most of us are, in fact, creatures of habit. When radio listening is part of that activity, it can be a great thing.
These are the people who love hearing a certain morning show on music stations, or a daily public radio program, a provocative talk show, or the play-by-play broadcast of a local sports team. We see these folks in focus groups all the time. Many tell us they can pretty much know whether they're late for work, for school, or an appointment when listening to a preferred piece of radio content.
Instead of trying to encourage, urge, or goad consumers to start using Alexa more often, why not tie its usage to something they're already doing? After all, there is no Alexa habit. The repeated use comes from consumers who enjoy something – repeatedly. Yes, radio listening. And Amazon could lean into it.
What if the radio broadcasting industry proposed a partnership with Alexa? To make sure there's impact, it could be a collaboration with the best stations in the top 100 markets. The idea would be to buy advertising schedules “5-deep” in each of these metros – running targeted Alexa ads on the five highest-rated stations in each market. The theory being that popular stations are doing something right to engender steady time-spent listening – that is, habit-forming. loyal usage.
The ads (perhaps voiced by Alexa) would encourage listeners of each station to listen in on Amazon Echo devices, along with the proper command. A pre-roll for Alexa would run ahead of each station's stream.
In that way, Amazon taps into something it simply cannot instantly grow, manufacture, or buy – habitual usage in every market in the country, reflecting an Alexa activity that many are already doing.
Who makes the proposal? Maybe it's a combo effort among the RAB and NAB.
And come to think of it, I'm in Las Vegas right now for CES. Erica Farber lives here, and the newly minted CEO of the NAB, Curtis LeGeyt (pictured), will be addressing our tour groups at our dinner tomorrow night.
Maybe even between courses, I float the idea.
- They Love Radio (But They Don't Love US) - May 18, 2022
- In Search Of: The “Best In Class” Advertising Model - May 17, 2022
- W.W.D.D.S. – What Would Don Draper Say (About Radio)? - May 16, 2022