Uber's ad business goes up a gear

The global ride hailing company Uber is rolling out its advertising business – already live in several markets – internationally, as its search for a higher-margin business continues.

The company has announced a dedicated advertising division and a new ad format called “Uber Journey Ads” to connect with consumers. 

The pitch

In the announcement, the company says it will leverage Uber’s first-party data and insights across its mobility and delivery businesses, giving the world’s biggest companies “compelling new surfaces and closed-loop attribution to reach Uber’s audience of 122 million monthly active users”.

There is a fair bit of bravado in the news release, with promises that the new ad units will “capture” attention, before a breakdown of the formats reveal a few sponsored listings, emails, and app ads that the company has trialled with PepsiCo and Chipotle.

The sell, then, revolves around the idea that its users are “purchase-minded”, in the words of new ad division chief Mark Grether.

Ads will be charged on a cost-per-trip basis, according to reporting by Insider, with each journey limited to a single advertiser that can show riders several messages over the course of the trip. 

Why it matters

Media is entering into a host of new sectors. There was the recent news that Kroger and Albertsons were merging, with a significant media business key to the plans. What's more, Netflix has launched an advertising tier, while even smaller retailers have been getting in on the action. It appears that media is no longer the preserve of media companies.

It’s been building

Uber has had its sights on advertising for some time. Chief exec Dara Khosrowshahi told a Bank of America conference of his aims to grow Uber ads to a $1bn business by 2024. Not only is it for scale, he said that it's a “very, very high margin business”.

The presumption had been that the company was building ads into its apps, but this news shows that it has plans to put ads in many more places.

And there’s more: Uber will be unveiling location and time-of-day targeted car top ads and is planning to put tablets in cars. It sounds like a lot.

Sourced from Uber, WARC, Insider