Is Google aware that Voice First devices will break the pay-per-click business model? originally appeared on Quora: the knowledge sharing network where compelling questions are answered by people with unique insights.
Answer by Brian Roemmele, Alchemist & Metaphysician, on Quora:
Advertising Does Not Exist In The Voice First World
After about ten years of me presenting this inevitability [1], [2], indeed now Google (and maybe a few other companies) seem to be aware:
"...one thing that we are all clear about is the days of three top text ads followed by ten organic results is a thing of the past in the voice first world"-- Sridhar Ramaswamy, Senior Vice president of advertising and commerce, November 29, 2016
During an investor call [3] on November 29, 2016 Sridhar Ramaswamy, Senior Vice president of advertising and commerce at Google spoke to the coming shift of their business model as voice first device interactions begin to dominate our lives. Web based search will never fully disappear, but a generation of kids are growing up around the Voice First revolution and fully expect a computer to be something they talk to and talks back.
Just like this generation now no longer has CDs, DVDs, Tapes or Records, the next generation will expect Voice interaction, not with pages of search results but AI assisted, ontology and taxonomy perfect answers, most particularly one answer. You and I will not tolerate radio-like advertisements, nor would we tolerate a telephone-like IVR list of advertisers. Thus, the writing is on the wall.
In April, 2016 I said [1]:
In The Voice First World, Advertising And Payments Will Not Exist As They Do Today
In the Voice First world many things change. Advertising and payments will particularly be changed and, in themselves, become new paradigms for both merchants and consumers. Advertising as we know it will not exist primarily because we would not tolerate commercial intrusions and interruptions in our dialogs. It would be equivalent to having a friend break into an advertisement about a new gasoline.
Payments will change in profound ways. Many consumer dialogs will have implicit and explicit layered Voice Payments with multiple payment type. Voice First systems will mediate and manage these situations based on a host of factors. Payments companies are not currently prepared for this tectonic shift. In fact, some notable companies are going in the opposite direction. The companies that prevail will have identified the Ontological Recipe technology to connect merchants to customers.
This new advertising and payments paradigm actually form a convergence. Voice Commerce will become the primary replacement for advertising and Voice Payments are the foundation to Voice Commerce. Ontologies and taxonomies will play an important part of Voice Payments. The shift will impact what we today call online, in-app and retail purchases. The least thought through of the changes is the impact on face to face retail when the consumer and the merchant interact with Voice First devices.
Of course Visa, MasterCard and American Express will play an important part of this future and all the payment companies between them and the merchant will need to rapidly change or truly be disrupted. The rate of change will be more massive and pervasive than anything that has come before.
This new advertising and payments paradigm will impact every element of how we interact with Voice First devices. Without human mediated searches on Google, there is no pay-per click. Without a scan of the headlines at your favorite news site, there is no banner advertising.
What Will Google Replace Advertising With?
An article by Business Insider [4] delves deeper into what Sridhar thinks will replace the legendary pay-per-click advertising, it will look familiar if you just read the quoted text above:
"I think it can range from being purely transactional meaning we make it convenient for you to fulfill a transaction with this assistance or it can involve promotion and our team is keeping an open mind about the kind of monetization opportunity that there is going to be."--Sridhar Ramaswamy, Senior Vice president of advertising and commerce, November 29, 2016
He goes on to contain and limit the impact by saying:
"This was our thesis for mobile. If people think there are a lot of worries about it was mobile incremental, was it taking away from desktop but it turned out that mobile expanded the pie." -- Sridhar Ramaswamy, Senior Vice president of advertising and commerce, November 29, 2016
Clearly, Google is aware and concerned. I have been building and researching around Voice since the mid 1980s. I have studied this problem for as long and compiled a Voice First Manifesto I started in 1989. Indeed Voice Commerce and Voice Payments will be the center of the Voice First revolution. Just as Google's pay-per-click model was the center of the web model. I have also identified forty-seven other systems that will replace the pay-per-click model and monetize Voice First interactions, Voice Commerce is just one I speak of in public.
Voice Commerce And Voice Payments Are Not Even Closely Related To Their Web Counterpart
Voice Commerce is orders of magnitude more complex then web commerce. Voice Payments are many orders of magnitude more complex then web payments and payment gateways. As it stands today, none of the young or legacy payment companies are prepared. The same is true for shopping cart companies, there really are no shopping carts in the Voice First world.
The Echo Dot was the best selling item on all of Amazon for Thanksgiving, Black Friday and Cyber Monday [5]. All signs point to it being the best selling item on Amazon for the entire holiday season or 2016. This translates into many millions of new Voice First users.
Google also released Google Home earlier this year and by all accounts, they are selling out during the holiday period of 2016.
Just these two devices will lift the use of Voice First devices to the 100s of millions in early 2017. As this period rapidly approaches, one thing is very clear, although Amazon is a commerce company they have not nearly perfected Voice Commerce. Google has quite a long journey and Apple will just be starting with AirPods and their own take on Voice First stand alone devices.
One more thing is very clear, adverting and payments will be dramatically and fundamentally changed in ten years. As I have stated: "In ten years 50% of all human to computer interactions will be via Voice meditated AI".
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