If you’re at the Enterprise 2.0 Conference (which I am not), there’s been a lot of discussion of the costs and benefits associated with supporting social media. John Furrier’s Silicon Angle had a nice article and Infographic depicting the known costs and the calculated benefits for companies (alright, “Brands”) like Coca-Cola, Victoria’s Secret, McDonalds and Nokia. His point is that quantifying the hard costs of supporting social media-based relationships is daunting, especially when the benefits are treated as uncertain. Yet there remains a social media imperative for nearly every company out there with a product or service to promote and a brand to protect.

To compound the decisionmaking process, technology providers (led by Microsoft, Google, Apple, Nuance, Vlingo and their partners) are laying the groundwork for new advertising and promotions – bordering on “engagement” models. As this post by Mark Kroese, the General Manager of Microsoft’s Advertising Business Group in the Entertainment & Devices Division, makes amply clear, Microsoft sees “the combination of voice and gesture” to support user interactions as “seminal” to new forms of advertising. And that means new revenues as well.

The video embedded in the Microsoft Advertising blog depicts five scenarios where a TV viewer (or at least a person watching a TV connected to an XBox) can use his or her voice to take specific actions. The first one demonstrated is the ability to say “XBox Tweet” to have the contents of a promotion posted to Twitter as a personal Tweet. By saying “XBox more” a viewer will be shown additional information about a promoted product or service. Saying “XBox schedule” when prompted during the course of a TV promotion would send an appointment to the viewer’s calendar app on a mobile phone or laptop and saying “XBox near me” when watching an add from a national advertiser will bring up a map with pins for local dealers or retail outlets.

These four use cases make it clear that Microsoft believes there is competitive advantage to providing a “voice and gesture” interface for TV viewers. At the same time, Google has a more modest goal of adding voice search and commands to every device running a Chrome based browser, including the new Chromebook, cloud-based laptop. Most analysts reported that Google is using voice to make search faster, which translates to incremental searches and advertising dollars for a company that dominates the Web search business.

As for Apple, it looks like Nuance, through acquisition, is adding embedded resources for a mobile (or virtual) assistant. After closing on SVOX, the company confirmed that – after acquiring the source code last March – it formally bought Noterize, a popular note-taking application for devices running Apple’s iOS. While it may stop short of “gestures” (a la Kinect), all of the Nuance apps support predictive texting as well as voice input.

As an Android-based aside, Nuance provided me with a demonstration phone (an Android-based HTC MyTouch 4G running on the T-Mobile Network. The unit features the “Genius Button” which jumps right to a screen that offers voice prompts for initiating phone calls, messaging (both text and email), Web search and local business search. It is slightly behind the “Virtual Assistant” demonstrated by Vlingo on the Samsung Galaxy at the Mobile World Congress a few months ago. But the integration of Noterize’s capabilities as a “memo pad” will correct one of the deficiencies, as will the inevitable introduction of a “trigger phrase” (or gesture) that obviates the need for a Genius Button, at least when it is in hands-free mode.

The question is whether the addition of hands-free voice and virtual assitant applications creates new business opportunities – above and beyond Google’s direct benefit from faster searches and voice-based click-throughs or Microsoft’s expectation to charge for new kinds of advertising. The answer is “yes.” Voice processing makes the phone into a voice-activated, highly-personal, virtual assistant. It will be the go-to tool not just for searching but for carrying out commerce. Where money changes hands, there is always an opportunity for revenue sharing. The topline is small now but, it is destined to grow, although devices makers, network operators and service providers all have designs an expectation of taking a share of revenue.

Traditional advertising, search advertising and share of transactions are the prime candidates for revenue models, but it is too early to rule out subscription models, fee for downloading software and activity-based revenues (E.g. per message or bundle of messages). It’s very early days for the gesture, trigger word and voice-based world of mobile commerce and the key players should not rule out any revenue model at this point. The mobile customer will ultimately decide.

Categories: Articles

Tags: speech-enabled mobile services, mobile user interface, revenue models