Amid losses, Uber driven to become advertising network
Don't want to see ads during your trip? Sorry, no app for that
Uber has announced the creation of an advertising division dedicated to helping brands "connect with consumers throughout the entire ride process." That's right. The entire ride.
The rideshare giant announced the division alongside a new ad platform called Uber Journey Ads, which addresses the troubling lack of advertising between booking an Uber ride and arriving at a destination.
Uber said it has already partnered with more than 40 "marquee brands" including NBCUniversal, Heineken, and United Artists, to deliver ads in a variety of places – in the Uber and Uber Eats apps, sponsored emails, in displays on top of cars, in-vehicle tablets, and so on. Kinda like taxis but with way more ad surveillance tech.
"Early results show that consumers were exposed to the ad content for approximately two minutes, resulting in two to six times the brand-performance lift compared to other benchmarks," Uber said.
The ad division will be headed up by Mark Grether, who previously served as the director of Amazon's advertising group. Grether said Uber has an opportunity to connect brands with millions of people using its software before, during, and after journeys. "With 1.87 billion trips last quarter, that means we can connect advertisers to consumers on average five times per month across rides and delivery."
Turning data into dollars, hopefully
Uber's finances continue to be astonishing, in a negative sense, even in the face of rebounding travel as the COVID-19 pandemic has eased. While the company has reported strong sales, it's still in the red.
In the first quarter of 2022, for instance, Uber earned $6.9 billion in revenue, but lost $5.6 billion in the same period. Much of the loss in Q1 was due to investments in other companies. Revenues improved in Q2, but Uber still recorded losses in the billions.
Uber reduced hiring earlier this year as well, and its stock has continued to slide, though picking up a little lately.
Meanwhile, there was a high-profile intrusion into company's cloud services, and proposed rules from the Biden administration that would see gig workers reclassified as employees instead of independent contractors, a move that caused Uber's stock to lose 10 percent in a single day.
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What Uber does have in its back pocket, however, is ride and food data for its purported 122 million monthly active users. They might even be able to learn something from the early efforts of competitor Lyft to help define the new advertising arm.
Lyft announced its own advertising subsidiary, Lyft Media, in August, while at the same time announcing two products from its new ad division: car-top digital advertising screens and in-car tablets that show a map of the trip and adverts. Uber's advertising plans include the same technologies, with plans for car top ads in "top US cities" and in-car tablet tests in Los Angeles and San Francisco.
"We're eager to continue working with our partners to identify best-in-class offerings … that will ensure they're engaging with captive and engaged audiences," Grether said. ®