Amazon eyes ads and upcharges for Alexa Plus

In the week’s least surprising news, Amazon CEO Andy Jassy revealed that the company is exploring ways to bring ads to Alexa Plus, its new generative-AI-powered voice assistant. During a conference call following the company’s second-quarter earnings report, Jassy said that “there will be opportunities, as people are engaging in more multiturn conversations [with Alexa Plus], to have advertising play a role to help people find discovery, and also as a lever to drive revenue.”

Basically, people will talk more to Alexa, so there will be more ways to push ads at them. He also hinted that Alexa Plus, which is currently free for Prime members but will cost $19.99 a month without Prime, could one day cost more. “As we keep adding functionality [there] could be some sort of subscription element beyond what there is today,” he said.

Considering Amazon’s Devices & Services division, which includes Alexa and Echo, has reportedly struggled to make money, Jassy is looking for ways to make its hot new thing, Alexa Plus, more profitable. Charging non-Prime members $20 a month may sound like one way. But who’s going to pay $20 when you can spend $15 for Prime and get Alexa Plus, plus all the Prime benefits?

Advertising is the obvious path, as ads already exist on Amazon Echo devices with regular Alexa on board. These include full-screen ones on Echo Show smart displays that appear randomly and can’t be opted out of.

Another way Alexa pushes ads is with its “By the way” feature, which tacks on suggestions to a response after you’ve asked something. These often involve encouraging you to buy something from Amazon.

When Amazon announced Alexa Plus back in February, I asked head of Devices & Services Panos Panay if “By the way” and full-screen ads would stick around. “I don’t think a lot of that changes,” he said, adding that advertising models on devices like Echos are designed to keep the costs down for customers.

I’ve been testing Alexa Plus for a few weeks now and haven’t seen any ads or received any “By the ways.” But the assistant is still in an Early Access beta phase, and it sounds like the plan is that this new Alexa will come with new ways to push ads. But I really wish it wasn’t.

In terms of what that might look like, back in 2022, Amazon said it had developed a Customers Ask Alexa feature that would allow brands to submit their own answers to questions people asked Alexa, such as “How can I remove pet hair from my carpet?” Alexa Plus, with its chattier, more helpful persona, would be an ideal platform to deliver this type of sponsored result. But that won’t cut it if Amazon is going to succeed in making Alexa Plus the “World’s best personal assistant,” which is Jassy’s stated goal. Why would anyone choose to use an assistant that is getting paid to push specific products?

One of those higher tiers for Alexa Plus Jassy hinted at could be an ad-free version, as TechCrunch first speculated. Amazon did exactly this with Prime Video, creating a higher price, ad-free tier and booting everyone else to ads. But either way, Alexa will really have to prove its worth if we’re going to pay for its new capabilities.

Based on my initial testing of Alexa Plus, it’s not at a point where I can delegate my daily tasks and chores to it, as I would do if I could ever afford to hire a real personal assistant. But the potential is there.

There’s no doubt that generative AI is going to transform how we use digital voice assistants, and Amazon has a head start. It has actually launched its revamped assistant with more conversational natural language abilities, something neither Apple nor Google seems close to doing. Alexa Plus is also one of the few generative AI-powered services that can take actions in real life.

Whether people will be willing to pay for AI features is still being tested. OpenAI, Google, Anthropic, and others currently charge for different tiers of access to their more advanced AI-chatbot tools. As an Alexa user for many years, I’d consider paying for a really good Alexa that does what I ask without fail, has all the features Amazon has promised are coming, and never shows me an ad. However, what I know for sure that I don’t want, is a chattier AI pushing products at me in my home.