Uber itself is no stranger to multiple product offerings. There's digital out of home (DOOH) on top of Uber (which is already live in certain markets), its in-app offering went live in the main Uber app a few weeks ago, and of course, its main display ad units live in its delivery apps, including Postmates and Uber Eats.
There's also an avenue of in-car advertising (where legal), but it is yet to create a unified network. I say yet. Uber advertising will appeal to a wide range of advertisers, product possibilities, technical challenges, and huge data opportunities. There's products and tech to build, as well as a massive sales job.
Most of the analysis on the appointment so far has focused on Grether’s jump from a big tech platform to a retail platform. But when it comes to connecting the dots, he’s well set up here. There are a few wider trends that will play a factor in the overall success that Grether needs to navigate in his new role.
The inevitable pivot to ads
Every business built on heavily subsidized, or even free entry (social media), needs to stop losing money eventually and advertising offers the way out. Uber was heavily subsidized to grow rapidly, recruit drivers and riders, and beat the competition. Now that its public prices are creeping back up and in the wake of the impact of the pandemic on user numbers, ads are a way to make money and keep fares competitive.
Anecdotally, in New York City, Ubers/ride hailing apps have always been a little more expensive than yellow cabs, which have loud (and frankly obnoxious) backseat ads and rooftop OOH. During the pandemic, the gap widened substantially - and people have taken note.
Serving ads but keeping riders
While Uber needs ads to raise revenues and keep fares manageable to maintain and grow riders, it also needs riders to show ads to and to sell advertising. This feels tricky to navigate. Uber is a polarizing company. Many people #Delete(d)Uber and never went back.
Cheaper fares will go a long way, but the ad experience will have to be very conscious of alienating users. It’ll want to educate riders that rider-facing ads (in-app or even in-car) keep fares lower. Some approaches to keep the experience painless could include a small surcharge for ad-free cars (such as no ads in the higher tier cars), an Uber internet radio network where they control audio ads (seems like this must already be happening), well-targeted promos (a coupon for a retailer close to your drop off point, a la Waze), and nuanced privacy features.
The battle for the No. 4 spot after Google, Facebook, and Amazon
When speculating on the coveted number four slot in the ad market, Uber’s name is conspicuously absent, with noise centered on the duopoly, then Amazon, then the rest of the pack. The Trade Desk, or even Apple, would at first glance appear much more eligible candidates. But Uber has the potential to surprise. While it may not have the unique user reach that a huge digital publisher has, it has a valuable amount of attention time to monetize —if it can reach users while in cars and ordering food. After all, all of these platforms trade on people's attention.
I like the odds of an app with lots of different revenue streams and product types. And it seems like Grether, who helped Amazon cement and grow their No. 3 market share, is a sensible pick to help move Uber up the ranks.