Amazon and Made By Google’s Intelligent Marketing

October 11, 2022 / Carolina Milanesi

The commentary on the latest Made by Google launch has been primarily on hardware. Still, I thought it would be more interesting to share some considerations on the overall strategy that transpired from the actual presentation, especially around Artificial Intelligence (AI) and how it compares to what we heard just a couple of weeks ago from Amazon.

AI is a term that has been used and abused so much that it has left consumers either confused about its role or, even worse, dismissive of its value. As a result, vendors need to be more precise about the importance of AI and how their offering differentiates from competitors.

Amazon has been referring to it as Ambient Intelligence. Made By Google refers to it as Personal Intelligence. Others call it ambient computing, but most consumers don’t call it anything at all. They just enjoy a cross-device experience that pre-empts their needs, lowers friction in their connected home and offers moments of delight.

For Amazon, the differentiation is the ability to connect devices in your home directly through Alexa or indirectly and deliver an orchestrated experience to the user. More recently, that experience has expanded outside the home to the car, almost making it an extension of the home. Alexa bridges from the car to the home to set lights, open or close doors, check on appliances and more. Whether it is through voice, an app, a screen or even a Robot, one can ask Alexa to perform tasks that are made more accessible by her awareness of one’s preferences, the environment, shopping habits, calendar and any other information one cares to share or that the devices themselves are collecting through sensors.

In 2018, I wrote that the flop of the Fire Phone freed Amazon to create the first Echo and Alexa with a focus on the home. Not having a screen that people carried around with them all day allowed them to lock Alexa into a black cylinder driving early adopters to let go of all the muscle memory we have with our phones to try and operate this new presence in our homes with our voice. The bet paid off, and now Amazon, which according to some market share numbers, is present in more than 50 million American homes with at least one Echo device. After the launch event, in an interview with Wired, Limp agreed with me, saying that Amazon’s strategy became a necessity when Amazon’s attempt to compete with iOS and Android failed. He said: “We weren’t planning failure. But sometimes a phoenix does rise—it allows us to accelerate our focus in the home.… Our view isn’t that you start with the phone and emanate outwards. Instead, you start with intelligent devices that are placed throughout the house or the car, that when they interact together, they act better. They’re always there.”

Amazon has successfully established Alexa as a helpful, if not trusted by all, companion in many homes. This allows Amazon to remain the preferred home ecosystem even when users might turn to Apple or Google outside the home. This is no trivial task, as data shows consumers are much more critical of what technology and brands they let in their homes. Whether it is because of privacy concerns or personal technology preferences, winning a home requires more effort.

Made By Google wants to differentiate through personalization. The company started to talk about it last year with the launch of Material U, a software design that intelligently customizes the Pixel phone and now Pixel Watch UI around the user’s color preferences and photos. Made by Google is pushing this idea of Personal Intelligence across devices that fit together from a design language perspective but are really brought together by the Google services users rely on. It was no accident that Made By Google is giving three months of free YouTube Music and six months of free Fitbit Premium subscription to buyers of the new devices. Using Google Assistant across these devices, in the same way, we might be using Alexa across our Echo devices in the home, creates stickiness to the ecosystem.

Google has more comprehensive data about us than Amazon has, at least for your average American consumer. Still, for Made By Google to be able to take advantage of that, there was a need to double down on the number of devices that link to the Pixel phone would add value to the user.

At the September Apple Launch event, Tim Cook spoke precisely to the value of a multi-device ecosystem. Interestingly, Apple did not call it intelligence but magic. Referring to the iPhone, the Apple Watch and the AirPods, Tim Cook said: “On their own, each is industry-leading. Together they provide a magical experience.” And he is right. Apple has been focusing on bringing these devices closer together so that users see the value of one device blur into the other. Maybe to this point, the new AirPods Pro can now be charged with an Apple Watch charger.

The value the user is receiving from these products spreads across them and increases at the same time, making it harder for a user to pinpoint where the value actually comes from. More importantly, even when the user can see which device is the weakest link, there is no incentive to try something different, as all the value received from other devices would be compromised. So creating an intelligent personal experience across devices is good for lowering churn and increasing engagement. It is also something that the tech-savvy Pixel users have been asking for quite some time. The Pixel Buds were a start, but the Pixel Watch was far overdue. And because the value users will be looking for is in the phone and watch working together, the Pixel Watch does not have to match the Galaxy Watch or Apple Watch feature by feature to be a successful product. Pixel Watch must deliver on core features and the experience of Google services. And so during the launch, the heart rate accuracy was highlighted as well as sleep tracking and the Fitbit Premium service.

Solidifying the phone plus watch experience will lead consumers to want more in the home as well, which is where the Pixel Tablet comes in. I’ve seen a few people comment that if there’s one area that Made By Google doesn’t want to go head-to-head with Apple on is a tablet. But this is not the goal with the Pixel Tablet, which could have been brought to market under the Google Nest brand as it looks more like a smart display on a stand that doubles as a tablet. Lenovo has been quite successful with its own smart display following the same design concept. Calling this device a tablet might have just made it easier for Made By Google to avoid being seen as getting into direct competition with Google Nest and possibly create less confusion for consumers. From a brand perspective, more consumers might be willing to let a Pixel product in the home rather than a Google Nest product. Interestingly, most consumers would refer to Pixel as such rather than by its full name Google Pixel. Yes, I know, all are part of the same company, but if it works for Instagram over Facebook, why not for MadeByGoogle over Google?

Of course, how successful these endeavors will be won’t just depend on the price point that we’ve seen being aggressive. The distribution channel is going to be essential. It was great to finally hear MadeByGoogle talk about a broader distribution for Pixel7, but we didn’t really hear the extent of the availability of the tablet and the watch. While I would argue that the success of this strategy is most needed in the US, both for Made By Google and Android, Europe offers a strong opportunity, given the current limitations Chinese brands face.

Consumers might still not care about fancy terms like Ambient Intelligence or Personal Intelligence. Still, it is clear that they care more and more about experiences, and that might just be how Amazon and Made By Google will be able to sell us on AI.

 

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