Amazon Alexa

Before consumers hear a radio station’s webcast or a podcast starts to play, they may one day hear a pre-roll ad inserted into the audio stream from Amazon. The e-commerce giant is pitching ad agencies about buying audio ads on its Alexa home speaker. The move follows beta-testing last summer when Amazon began tucking audio ads into its streaming music service.

The audio ads require a minimum commitment of $50,000, according to what one client told Business Insider. That’s more than the $35,000 threshold Amazon has for video ads. Agency executives also say that Amazon is selling the audio ads at CPMs that are 30% to 40% less than what it charges for Amazon’s streaming television service.

For months buyers have been told to expect a first quarter expansion of Amazon’s menu to include audio. Details of the pitch first leaked last July when a pitch deck was obtained by Ad Age touting at least one million guaranteed audio impressions to potential buyers, with reporting back to the clients of total impressions and audio completion rates.

During the beta-test, Amazon told buyers that while it would accept either :15- or :30-second ads, it prefers :30s. The spots also had to be appropriate for all ages, free of “violent, threatening, suggestive or provocative” content. Kellogg's PopTarts is said to be one of the brands that took part in the test.

Now as the product is close to going live, marketers say the Alexa ads will initially only be offered as part of the Amazon Music service and won’t play in any skills that radio companies, podcasters and other streaming audio providers have created. It’s unclear whether Amazon plans to eventually expand its advertising to those content creators that are distributing their product through Alexa. If that happens there already is demand. One agency executive told Inside Radio that clients listening to podcasts have already been approached him asking how they can get their spots into podcasts being consumed on the home speakers.

Still, some are surprised Amazon would reverse course and begin offering buyers Alexa avails at all. “I literally gasped," one agency executive told Business Insider. "I was truly shocked because Amazon has made such a big deal about not using [Alexa] as an ad platform for so long."

Even if the Alexa ads are limited to Amazon Music, it will still give buyers a sizable audience. The company reported last month that the streaming music service has reached 55 million subscribers globally. That includes paid users and those who opt for the free, ad-supported tier.