Nuance Brings Madison Avenue Mobile Ads That Talk To You

4/1/13Follow @bromano

If you could have a conversation with an ad on your mobile phone, would you pay more attention to it?

Nuance Communications (NASDAQ: NUAN), maker of widely used voice recognition software, and some of the biggest names in advertising are betting that you will. The company is putting its technology in the hands of Madison Avenue in the hope of creating a new category of interactive advertising better suited to the small screens—and good microphones—of mobile devices.

In Nuance’s Seattle office, Mike McSherry launches an app for a fictional brand on his iPhone. “Tell me what you want to know,” the device, now in the guise of a talking Magic 8 Ball brought to you by Alpha Deodorant, says.

“Should I quit my job?” asks McSherry, who joined Nuance in 2011 when it acquired Swype, the Seattle software keyboard maker he was heading.

“How old are you?” the nasally 8 Ball voice asks.

“44.”

“I don’t know,”  the 8 Ball says. “There’s hardly anything worth doing after you’re 40. But regardless, just to keep yourself sharp, use Alpha. We’ll both be glad you did.”

The back-and-forth with the phone is smooth—one of 50 different dialogues created for the demonstration—and not unfamiliar in the age of Siri. It’s not hard to imagine something much more compelling from the copywriters and digital creatives at the likes of Leo Burnett, OMD, and Digitas—the three advertising agencies partnering with Nuance to launch this new promotional format.

Mobile ad networks Millennial Media, Jumptap, and Opera Mediaworks are also on board, as is Celtra, which makes tools for authoring mobile ads.

And major brands will be putting interactive voice ads to the test soon, McSherry says.

“By announcing the broad partnership structure, we’re essentially saying this is now a new mobile ad unit that is being broadly supported within the mobile ad industry,” he says.

Burlington, MA-based Nuance has been perfecting voice recognition software for nearly 20 years and is now proliferating it to as many industries as possible. It serves the medical field with transcription software; powers the interactive voice response systems you reach when calling the 800 numbers of major corporations; runs in-car voice recognition systems; works with Apple, Samsung, LG, and other major mobile, tablet, and television manufacturers; and sells its Dragon NaturallySpeaking desktop software. The company posted a $207 million profit in fiscal 2012 on revenue of $1.65 billion.

Nuance set McSherry, a serial mobile entrepreneur, to work on finding an advertising business model, and with the help of his office mate and former Swype employee Sundar Balasubramanian, worked on voice-search based advertising—an effort that’s ongoing—before landing on the idea of Nuance Voice Ads. McSherry credits Balasubramanian for thinking of it.

But anyone who’s seen Minority Report is familiar with the concept.

The timing is right, McSherry and Balasubramanian believe, thanks to Siri and the changing relationship we have with our phones. Several websites celebrate the witty repartee of the personal assistant application in Apple iOS.

Meanwhile, advertisers are struggling to crack the code for effective mobile marketing—throwing $8.4 billion at the problem in 2012, according to eMarketer statistics cited by Nuance.

Balasubramanian says the 30-second TV spots that get shrunken for mobile screens don’t work anymore.

“The agencies are sitting there saying how can I justify spending this much money on mobile? I’m just not getting the engagement I need, and voice ads solves that for them, because you transcend the entire screen size,” he explains. “Now a user can literally ask any question they want, whether it’s about having witty chat bot dialogue, or trying to extract information on horsepower or miles-per-gallon from a car commercial—all of that can be done without any screen-size limitations.”

The Nuance voice recognition technology is easily adapted to this purpose, he says. It’s the proliferation of mobile devices—a billion potential voice ad users across supported platforms including iOS, Android, Windows Phone,  and Kindle—and powerful cloud computing that make it possible today.

Nuance and its partners believe getting consumers to participate in an actual conversation with brands—isn’t that what social media marketers are all trying for these days?—will be more powerful than other forms of digital advertising.

Voice ads also carry the promise of more accurate targeting. Gender, for example, can be determined from voice with extremely high accuracy, McSherry says.

They expect voice ads to command a small premium over current rich media advertising unit rates, he says.

Benjamin Romano is editor of Xconomy Seattle. Email him at bromano [at] xconomy.com. Follow @bromano

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