To Hear More Ads, Press One

Date view Thread view Subject view Author view

From: Rohit Khare (
Date: Sun May 14 2000 - 08:08:01 PDT

May 12, 2000
To Hear More Ads, Press One
Voice portals are an alluring new medium -- if advertisers can keep
people on the line.
By Andrea Hamilton

Imagine this: you're in your car, it's rush hour, and you can't wait
for the next radio traffic report to decide which route to take to
avoid a jam. If you could jump on the Internet, you could find the
information in a flash. But most cars still lack Web access.

That's changing. Via a new breed of services called voice portals,
you can access the Web by talking on your phone. The services are
free, although they require callers to listen to ads; while the
portal's browser is downloading the latest traffic information, you
may hear a 15-second ad. Alternatively, the stock quote or movie
review you've requested may be "brought to you by American Express
(AXP) ."

Voice portal enthusiasts see the technology as the hottest Internet
innovation since Web-based e-mail. Available through a toll-free
number from an ordinary phone, these portals offer Web-based
information to people without access to a computer.
The voice portals offers services in a range of categories: news,
weather, sports scores, stock quotes, movie listings and so forth.
The portals use speech-recognition technology to process spoken words
into text commands, retrieve data from the Net and then read it back
to the caller. A dozen portals have launched pilot versions, with new
entrants jumping into the mix every day, each offering variations on
a similar theme. And almost all are banking on advertising as their
primary revenue source.

Steve Chambers, marketing VP for SpeechWorks International, a leader
in speech-recognition technology, believes the concept could be a
boon for the ad industry - targeted, interactive messages delivered
on the most ubiquitous device of all, the telephone. Based on Web
browser technology, the ads on most of these services usually invite
the caller to interact by having them ask for more detailed
information on a special offer, or connect directly to a merchant to
purchase something.

Whether consumers will be willing to put up with this kind of
advertising remains to be seen. The question is will people be
willing to listen to ads over their phones in order to get a free
stock quote or traffic report?

"The compelling argument for the portals is ubiquitous [Internet]
access, and that's about speed," says John Dalton, an analyst with
Forrester Research (FORR) . "You are asking for trouble to interrupt
that with an ad."

The truth is that no one knows exactly how - or how well - this new
medium will work. Among the handful of services currently running,
business models are still in flux and the types of ad offerings vary
from week to week. None of the portals would provide revenue data -
to date, it is no doubt miniscule. But anticipation is keen. The
Kelsey Group, a Princeton, N.J.-based research firm, recently
estimated that in 2005 voice-portal services will generate $5.4
billion in revenues from ads and transaction fees.

"You are looking at a market that needs to pay attention to how to
make money," says Chambers. "There are 30 people offering stocks and
weather. It's a different way to think for voice vs. visual ads."

For the voice portals, one obvious fact is that people hear
information differently than they read it. These aural ads are
neither traditional, passive-listener audio spots nor scanable visual
displays. Another critical difference is that callers hungry for
information are a captive audience, whereas Web surfers have the
option to ignore the blinking banner ads.

"You can't do ads the same way [as clickthrough banners] when it's a
forced listen," says Jeff Snyder, a senior analyst with Dataquest.
"You are on the phone, and there is no way out. The 'piss-off' factor
is going to be very high."

The companies are trying various approaches to combat that issue. One
technique is the four-second 'billboard' spot: "This stock report
brought to you by Mega-Humongous Securities." uses a
permission-based approach: a short sponsor mention, with the option
to continue with a longer message. More sophisticated systems will
allow transactions from the same call.

Portals typically have a registration process so the system knows who
is calling - and from where - so ads can be targeted accordingly.
Analysts say the personalization factor is critical. "You don't want
bachelors listening to diaper ads," says Dana Thorat, a senior
analyst for International Data Corp.

The tricky part is knowing how far the services can push consumers
before they'll stop dialing. "Focus groups found college students are
very willing to listen to an ad if they can get a free service - so
long as the ad doesn't interfere with the service," Thorat says.

At the same time, "You've got to keep users interacting with the
system," says Thorat. "It should not be 'listen only.' The user has
to purchase, respond to promotions, do banking or [visit] E-Trade or
whatever. The more interactive the users are with the system, the
longer they are on it, and the more carriers want them."

TellMe Networks, for instance, offers a free two-minute long-distance
call to people willing to listen to a 15-second ad. As there's little
hard data - the first voice portals went live in February - the
chance of success using that approach is uncertain.

Consumer resistance has spawned new approaches. SpeechWorks is now
offering a product intended to help its customers, the voice portals,
avoid some potential pitfalls. Chambers describes SpeechSpots as a
response to "banner backlash," and the need for a new advertising
model suitable to the voice environment. From its research,
SpeechWorks determined that a good aural ad has three key
characteristics: It is short (four to six seconds maximum); it's
permission-based, with an option to cut off or keep going; and it
never interrupts.

One company is banking on the idea that consumers actually want to
listen to ads - and only ads. Chicago-based ShopTalk doesn't claim to
be a portal, but a "mobile-commerce" provider, says CEO Eric Linn. It
offers all advertising, all the time. Users dial an 800 number and
listen to a selection of ads and promotions. They make choices by
category or can opt to listen to monthly specials targeted according
to their registered profile. As the system is upgraded (it launched
in early 1999 with key-pad entry, and is switching to voice commands)
shoppers will be able to make a purchase, bookmark a message or
forward it to their e-mail accounts.

And if the idea of people voluntarily calling to listen to ads seems
far-fetched, the numbers say otherwise. Some 300,000 users have
registered - the target audience is "busy moms" - who typically call
in five times each month to listen to a total of 20 or more messages.
"Our customers don't look at it as advertising. They use our system
to shop. It's a more convenient way to get offers," says Linn.

The technology that marries voice to the Internet poses many
possibilities for advertisers, but there are serious land mines, as
well. While everyone agrees there is a right and a wrong way to do
this, determining which is which will be a process of painful trial
and error.

As Chambers of SpeechWorks concedes, "A lot of people will muck this up."

Andrea Hamilton is a writer based in San Francisco.

Date view Thread view Subject view Author view

This archive was generated by hypermail 2b29 : Sun May 14 2000 - 08:15:04 PDT