Uber’s advertising business has smashed its $US1 billion ($AU1.54 billion) revenue target six months ahead of schedule with the company’s international head of sales, Paul Wright, hailing the Australian and New Zealand markets as “critical” in its journey thus far.
Speaking to B&T exclusively ahead of the release of Uber’s Q2 earnings, Wright said that the company was “very pleased with where it had got to so far” but it wasn’t “close to its destination” with “a lot more to do.”
The $US1 billion target was seen as a lofty goal by much of the industry when Uber launched its ad division two years ago, despite it enlisting former Amazon advertising exec Mark Grether to run the business.
It also sees Uber buck the trend for declining ad spend in Australia. Guideline SMI reported that ad spending as a whole dropped by 1.6 per cent year-on-year, with outdoor and digital audio the only real bright spots.
In the last three months, Uber Advertising has expanded its Journey Ads to programmatic buyers in Australia and New Zealand. It has also recently seen “strong momentum” in Sponsored Items and consumer packaged goods (CPG) display advertising on Uber Eats.
Broad Reach, Bespoke Opportunities
While Uber has enormous reach across its main mobility offering and its Uber Eats food delivery business, Wright said that it was because Uber Advertising functions as a choose-your-own-adventure service for advertisers that it was growing so rapidly.
“Reach is one thing, but I think it’s more the multitude of solutions for advertisers depending on who you are,” he said.
“If you’re a restaurant partner or a convenience partner, then there is one set of solutions which is very performance driven. If you’re a CPG, there’s another set of solutions with a combination of performance and brand.
“This is why Uber Ads is quite unusual because we have a very strong upper funnel solution with what we do in the Rides business as well as a more traditional retail media performance business.”
While some may baulk at the relatively nascent retail media sector already being called “traditional,” for Wright, Uber’s combination of both the upper and lower funnels with a highly engaged audience is “powerful”.
For instance, Pernod Ricard brand Absolut Vodka leveraged its sponsorship of Sydney World Pride last year to drive awareness and sales as revellers travelled around the city and whilst they were at home. The campaign saw a 38 per cent bump in units sold on Uber Eats.
Similarly, HSBC leveraged the platform to tell international travellers at airports that they could shop in their own currency when travelling.
The campaign was targeted to international travellers in Australia via Journey and Post-Checkout Ads and using Uber’s first-party location signals, it could make sure to hit travellers, not border control staff clocking on or off for their shifts.
More than half of users said the ad caught their attention, with a 14 percentage point boost in likelihood to search for additional information and a six percentage point bump in intent to use the HSBC card.
That brands are looking to activate on Uber — or in any media — with this level of user accuracy should not be surprising. After all, media players practically fall over themselves at upfronts presentations talking about the depth of their first-party data and the innumerable ways in which it can be activated. For Wright, however, Uber’s data stands apart and is a key reason it is growing rapidly in a sector that is facing an overall decline.
Changing Gears In A Changing Market
“The whole retail media sector, and it varies by market, has taken advantage of the uncertainty [created by Google’s flip-flopping on third-party cookies] and, let’s be honest, a lot of data targeting was not very effective. We were sort of collecting cookie data and hoping it worked,” he said.
“Retail media is much clearer and therefore is a good investment for advertisers… It’s inevitable that there are going to be a lot of people trying to get into this space. But I’m not so sure it’s going to work for everybody because of the scaling thing. Just because you have first-party data does not mean you’re going to get advertisers to buy enough volume to make it worthwhile — but there is a bit of a gold rush at the moment.”
Of course, the money for Uber Advertising’s rapid growth had to come from somewhere. While it may be easy to point at social ads or linear TV — which seems to be the industry’s whipping boy when it comes to ad spend at the moment (though not when a trip to the Olympics or Euros is on the cards) — Wright said that Uber Advertising is eating everyone’s lunch.
“If you take CPG businesses, a lot of the engagement we have with CPG is with their ecommerce teams — so the Unilever or Mars ecommerce teams have dedicated budgets for that now because of their portfolios. That’s probably true of most of the restaurant partners too,” said Wright.
“If you look at what we do with Mobility on the non-endemic side, that’s probably coming from digital display and digital video budgets. Whether we’re taking money directly from social or broader display, I don’t know the answer to that. But it comes back to retail media taking a disproportionate share at this stage.”
With the time spent in its ads growing, as well as the use of screens in the back of cars in the US (though not on their roofs, Uber quietly sunsetted that surface earlier this year) Wright said that there was a “really big opportunity” with what it would broadly call “mobility media”.
“That gives us uniqueness in the marketplace which is going to be needed as we grow.”
Of course, new ad networks seem to be popping up faster than most can keep up with. Netflix launched last year in Australia and Amazon’s Prime Video Ads launched last month. The number of retail media networks is growing rapidly, too, with brands such as IGA recently entering the space and VMO expanding its gas station forecourt offering last month.
“We’re global [like Amazon Prime Video and Netflix] but we’re different in a global way. When we think about our customers, we have clear intent within our customer journey. We know that someone’s going to Sydney Airport or Heathrow or a store in Manhattan. From our point of view, our data is clearer,” said Wright.
“We have the intent built in.”
What the next two years holds remains to be seen. But we can’t expect Uber Advertising to be pumping the brakes any time soon.
