Uber Quietly Advances its Advertising Business

One ongoing possibility that we and others in the analyst corps continue to track is Uber’s moves into advertising. The thought is that its position as a pervasive transportation platform could enable it to launch a location-based ad play for mobile devices and in-ride marketing.

This possibility took a step closer to reality this week as Business Insider discovered – based on LinkedIn status – that longtime ad tech and agency veteran Mark Grether is now at Uber. Grether previously directed advertising at another ad-world rising star: Amazon.

Before Amazon, Grether’s rap sheet includes ad tech startup Sizmek (which Amazon acquired) as well as ad giant WPP. While there, he also co-founded the agency giant’s programmatic ads business Xaxis. All these roles signal competency in launching new or young ad businesses.

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The Next Phase

That brings us back to Uber. Its ad efforts remain somewhat embryonic and aligned with the program-building needs Grether potentially brings to the table. According to his LinkedIn post, his role will be to “develop the next phase of its global advertising strategy across 32 markets.”

Grether’s role started in June according to BI, which could be good timing as Uber revisits its ad business. Since we last wrote about it, a pandemic swept the globe, hitting Uber relatively hard. This may or may not have slowed ad ambitions as the company focused on the core business.

That said, Uber’s ad business is no slouch. It has reported that ad revenue is on track to hit a revenue run rate of $300 million next year. This so far includes ads that it shows to the 100 million users of its properties including the flagship Uber app, Uber Eats, and Postmates.

Joining these digital channels is the physical inventory that Uber can access. In other words, vehicles themselves present targeted opportunities to tap into out-of-home ad budgets. It has already started working with Adomni to place display ads on top of drivers’ vehicles.

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In-Ride Mode

One of the things driving Uber’s ad ambitions is revenue diversification. Similar to our ongoing analysis around Amazon, any maturing business can benefit from additional revenue streams that can help maintain revenue growth – especially public companies scrutinized on a quarterly basis like Uber.

Advertising can improve Uber’s margins, which is something it also needs at this stage. Even pre-pandemic, Uber was unprofitable as it reinvested revenue to capture market share in hundreds of new markets — the name of the game in new marketplace businesses.

But ad-business drivers – and parallels to Amazon’s growing ad business – don’t end there. For Uber, advertising dovetails nicely with its core business. In that light, one of Uber’s lesser-discussed advantages is its “in-ride mode” – the UX that flips on when your ride starts.

This essentially gives Uber your captive attention during rides, given in-app mapping and ETA. Constantly looking down to check these status updates can be coupled with ad impressions. Furthermore, Uber knows where you’re going (think: destination-based promotions).

Panning back to Uber’s expanding list of apps, this can create an even greater mosaic of first-party data for ad targeting. And as we’ve examined, a privacy-first world favors extensive first-party networks. Uber could be just that, further fueled by a gold mine of location intelligence.

We’ll keep watching for more evidence of Uber’s sleeping-giant ad business.

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