Have connected speakers become the new home radio and music receiver? What are the key trends for advertisers and publishers?
Science fiction fans will remember HAL, the virtual assistant – humanised and self-aware – from the film “2001: A Space Odyssey”. While reality has not yet caught up with fiction, recent advances in smart speakers and personal assistants are already enabling practical interaction and facilitating the delivery of digital audio content into homes, where radios are becoming increasingly rare.
According to the latest NPR Smart Audio Report, 52% of connected speaker owners now use them multiple times per day. This compares to 46% before the advent of COVID-19. 36% of US adults who have a speaker say they have increased their use of it for music and entertainment since the pandemic. Among 18–34-year-olds, this is a full 52%.
In Europe, the French market is also particularly dynamic. The latest Médiamétrie report states that 3 million people now listen to radio on digital media – including connected speakers – on a daily basis, i.e. 15.1% compared to 12% five years ago.
Are connected speakers the new radio set? All the indicators suggest so. Publishers are finding new distribution channels and advertisers can celebrate: the opportunities are immense.
Continued sales growth
According to the latest Infinite Dial 2021 report, 33% of US households already own at least one smart speaker. Among people who work from home (telecommuters), the proportion rises to 49%. In 2018, 67% of households owned one and 22% owned two. Today, 45% of households have one speaker, 23% have two and 32% have three.
This is good news for the market for smart speakers, which is growing faster than the market for other smart home appliances and proves that consumers are now confident in technology they find natural to adopt. The trend towards voice activation confirms this. 71 % of consumers prefer to search by voice rather than by tapping on a screen or a keyboard.
The growth in the sales of smart speakers worldwide is staggering. A recent study by Omdia estimates that sales jumped by 58% in 2020, to 154 million units. The current installed base is estimated at 512 million (Q4 2021).
The importance of the price factor
Price seems to still be the key factor in the decision to purchase a connected speaker. 79% of smart speaker owners say they are satisfied with their device. 59% rate their experience with smart speakers as “excellent”.
In other words, consumers find the technology useful in many aspects of their daily lives. Products such as Google Home answer questions correctly in 94% of cases, while the HomePod (Apple) is successful in 85% of cases.
Who are the stakeholders in voice activation?
According to the latest study (Q3 2021) by Strategy Analytics, Amazon dominates the voice-activated speaker market with 28.6%, ahead of Google (16.7%), Apple (11.3%) and Baidu (11%).
Hi-fi manufacturers, who are often neutral, use Google Assistant and Alexa. The best known and most popular brands are: Sonos, Harman Kardon / JBL, Bluesound, Bose and Sony.
Where is the connected speaker?
A study conducted by Edison Research in the USA in collaboration with public radio station NPR is a perfect illustration of the way the connected speaker is replacing the radio. It shows that 52% are located in the living room, 24% in the kitchen, 12% in the master bedroom and just 4% in the office.
How are connected speakers used?
NPR’s Smart Audio Report provides insight into the commands used on connected speakers based on daily habits:
- listening to music – 85%
- asking the time – 62%
- taking calls – 42%
- setting an alarm – 65%
- asking for a weather forecast – 74%
- listening to the radio – 45%
- ordering food – 18%
- consulting traffic reports – 28%
- making a call – 32%
Listening to music is therefore the most important activity on a connected speaker. What effect has the pandemic had on this? A boom in listening to streamed music, as is confirmed by Blake Kozak, senior principal analyst at Omdia: “Listening to music online has also been a striking development for consumers, while the increase in the use of AI assistants (Siri, Alexa) has been more muted.”
Opportunities for advertisers
According to Omdia’s latest Smart Speakers 2020 report, total smart speaker revenue now stands at $3.2 billion globally, with North America showing the strongest growth: 71% last year with 72.9 million units sold, just ahead of Asia with 48% at 64 million units. Europe ranks third, with 16 million units sold.
The connected speaker now clearly has a place at the heart of the home, being used for listening to both music and the radio. It is a unique opportunity for advertisers to reach audiences available at home, immersed and captive to the audio content offered by smart speakers.