Amazon has updated their Alexa Skills Policy to outright ban nearly all advertisements from skills. The policy used to state that ads were only not allowed in Alexa cards, which are the visual snippets of information that appear on the Fire TV and Fire Tablets, that compliment Alexa responses. Now the Alexa skills policy states that a skill will be rejected from entry into the Alexa Skill Store if it “contains any advertising for third-party products or services, except in streaming music, streaming radio or flash briefing skills.”
Monetizing Alexa skills has been nearly impossible for developers, since traditional methods, like banner ads and in-app purchases, are non-existence on the platform. It was only after Amazon added the ability for Alexa skills to stream audio that the first viable monetization method became possible. Some developers have chosen to use the new functionality to play short audio ads at various points in their Alexa skill.
The change banning of ads by Amazon may also be a response to a company called VoiceLabs which recently announced a new advertising program aimed specifically at Alexa skills. The program, which they’ve already been testing, plays audio ads within Alexa skills, but also has richer interactive ads that Alexa users can choose to engage.
Monetary compensation for developers is a necessity to encourage a thriving ecosystem of third-party participation on a platform. While some can survive on voluntary contributions, most high-quality developers need stable funding from app purchases, whether they be upfront or in-app, or from advertising.
Amazon has yet to introduce a way for developers to make money from their Alexa skills. With the store already consisting of over 10,000 skills, most of which are not worth your time, you have to assume they’re working on a way for developers to make money on the platform, in order to attract higher-quality skills.
Paid Alexa skills, which require an upfront purchase to use, are almost inevitable. However, smartphone apps have taught us that the most profitable apps are free and earn money in ways other than direct upfront purchases. Amazon is going to need to figure out a way to adapt advertising and a “pay for more” system to the world of voice applications, without annoying users and hurting the ecosystem.
If a clear path towards monetization isn’t available, developers will create one of their own, as is already being done. Amazon’s policy change is likely an effort to lock down the system to give themselves more time to deploy their own solution for making money from Alexa skills.