At an investor conference last month, Google’s Chief Business Officer Philipp Schindler identified a vexing challenge for the company’s most prized app: its virtual assistant.
Searches via Google Assistant may not be ideal for generating revenue, he suggested.
When results are visible, not merely oral, “you have room for advertising, of course,” said Mr. Schindler, whose company grosses an estimated $70 billion annually through ads above search results.
The Alphabet Inc company declined to elaborate on Mr. Schindler’s remarks. But Google’s conundrum is one facing several tech companies whose users increasingly seek help from voice-enabled speakers and gadgets.
The question is most acute for Google, which holds the world’s biggest search advertising business.
So far, consumers get answer from virtual assistants without ads. And tech firms have not shown how they would include the “Sponsored” or “Ad” disclaimers that regulators require.
Curated output
One Google Assistant feature already is close to violating disclosure rules, according to five advertising attorneys contacted by Reuters. Google contends it is in compliance.
The feature recommends plumbers and other local home service providers without disclosing that the results draw from a curated database mainly composed of companies that joined its marketing programme.
“It’s not a completely clean recommendation,” said Michelle Cohen, an attorney. “If there’s a financial commitment, you’re supposed to disclose it.”
Conversing with assistants is routine for millions of people globally, whether on bedside alarm clocks, car audio systems or even high-end headphones. More than 1 billion such devices have Google Assistant, 100 million Amazon.com Inc’s Alexa and at least 1 billion Apple Inc’s Siri, according to the companies and estimates.
The Federal Trade Commission, which regulates deceptive business practices in the U.S., has long required search engines to inform users in a “noticeable and understandable” fashion when results are connected to financial relationships. That is why consumers see “Ad” or “Sponsored” labels next to Google results on screens.
Google gets paid when users contact providers through the ads, which are labelled “Sponsored” on Google.com. But when Google Assistant responds to “plumber” queries with the same “Google Guaranteed” options, the assistant does not offer any disclaimer or further explanation.
Google said that the results are not labelled as ads “because Google isn’t paid for these results” when delivered on the Assistant rather than Google.com.
The attorneys said that users should be informed that Google Assistant results, even if not paid for, stem from a filtered database.
