Smart speaker ads on the increase in China

Advertising through smart speakers and other hardware devices with AI-enabled voice assistants increased by 42.7% in China in 2019, according to a report from consulting agency Mininglamp Technology.

Moreover, brands using this kind of advertising can expect to see eye-popping increases in conversions, according to the report. 

The report, which was shared by Baidu, also discusses Baidu's smart speaker, Xiaodu, and suggests that smart speakers are an attractive option for advertisers, as they enable short and instant interactions that can trigger customers’ shopping desire.

The majority of smart-speaker users are between 25 and 34 with high personal income. And ads on the platform elicit a higher conversion rate than ads for the same products in mobile apps, according to the report. For example, the report discusses an ad for a dairy product that offered a reward for interaction. When hearing the ad on the smart speaker, 48.9% of the audience went on to the e-commerce site, compared to a 26.8% conversion rate for the in-app advertisement. 

The report argues that while display advertising, especially in the PC or desktop segment, is declining, advertising though AI-equipped hardware, including smart speakers and televisions, represents a better choice for brands.

Interactive advertisements on these platforms have a higher chance of triggering the audience's willingness to buy the product, the report said. On average, more than 40% of the audience interacted with their smart speaker when hearing such ads, leading to a 176% increase in the audience's will to purchase, compared with linear TV advertising or in-app ads.

Baidu says its artificial intelligence technology allows Xiaodu to provide an inclusive advertisement solution for brands. As Baidu has its own cloud services, news distribution channel, and content, it can use big data in its ecosystem to keep the audience in the loop and push accurate advertisements based on user preferences.

Advertisers value AI-driven advertising more than other forms, according to Mininglamp's report. As compared to other technologies, such as automation, data collection and closed platform technology, more than 70% of advertisers will choose AI technology first in their campaign, the report said.

Baidu produced 5.7 million smart speakers in the fourth quarter of 2019, ranking first among all Chinese companies, according to research firm Canalys. The company said users spend an average of three hours per day in interaction with their speakers. Since everyone spends more time indoors, maybe it is good timing for brands to explore the value of these new advertising channels.