Uber has launched its own advertising company To attract more customers; with its new business section, the ride-sharing company wants to speed up the growth of its income.
A top executive at Uber has suggested that advertising could be used to lower the prices of the company’s rides without cutting the drivers’ pay. By displaying advertisements within its applications, on top of cars, and on the backs of seats, Uber hopes to create a business that is worth $1 billion within the next two years and will launch its worldwide advertising unit with that goal in mind.
The division was established earlier this year to expand Uber’s existing advertising business, which primarily consists of advertisements displayed within the Uber Eats app and car-top billboards in a select number of markets. The division is being led by Mark Grether, a former advertising executive at Amazon.
According to statements made by Uber’s Chief Executive Officer, Dara Khosrowshahi, the firm is working toward reaching an annualized gross ad booking revenue of $1 billion by the year 2024. Khosrowshahi said at a conference for investors a month ago that the current advertising business had a gross booking run rate of $350 million per year during the second quarter of this year.
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Uber’s ad platform currently operates in multiple countries
Uber has said that its advertising platform is already working in dozens of countries and that the company plans to expand its global reach over the next year.
Displaying promos to consumers within the Uber app when they book or finish a journey is one of the new advertising formats that has been tested in select areas. Companies will also be able to put ads on the Uber Eats app’s home page or send emails to Uber’s 122 million monthly active users all over the world.
The corporation will use tablets that are fastened to the backs of vehicle seats to display trip information as well as advertisements in Los Angeles and San Francisco as part of a plan that is now in the testing phase. According to Uber, passengers would have “full control” over any advertisements that included sound.
In a statement released on Wednesday, Grether said, “Through our advertising division, we can help leading brands grow their relationships with consumers by connecting them at a time when a customer is especially paying attention.”
Uber’s competitors also took the same steps
Competitors DoorDash and Lyft have made similar moves as the gig economy companies transition to advertising as a new high-margin revenue source. Marketers are looking for new areas to reach consumers in the wake of recent privacy improvements implemented by Apple. Businesses with a lot of first-party data about their customers’ actions and plans will benefit from the reforms, limiting the data that can be used to make targeted ads.
When it came to money generated by search ads, Andrew Lipsman from the advertising research organization Insider Intelligence stated that Uber was in third place after DoorDash and Instacart. He went on to say that adding more advertising to the journey could end up being counterproductive.
It is unwise to display advertisements on tablets in the passenger area. Autoplaying video ads are something that almost all customers hate, and it’s one of the main reasons why people switched from taxis to Uber in the first place.
The car-top advertising scheme that Uber began offering in 2019 in a few select cities pays drivers “rent” depending on the total amount of time they spend driving with the advertisements displayed on top of their vehicles. Uber did not tell drivers more about how much they might get paid if they let ads be shown in their cars.
In a recent interview with the Financial Times, Uber’s head of mobility, Andrew Macdonald, said that advertising could be used to lower the cost of rides without cutting into drivers’ profits.
“If drivers earn more dollars because they’re also monetizing their assets—their cars—then we can keep rider prices lower,” said Macdonald. “If drivers earn more dollars because they’re also monetizing their assets, then their cars.” “This is one of the few things that we can do that will allow drivers to earn more per hour without requiring us to charge customers even a single additional dime.”