Uber has big ambitions for its nascent advertising business.
Speaking at the company's investor day on February 10, Uber's recently appointed ads chief Mark Grether laid out the vision to grow Uber Ads into "a $1 billion-plus revenue opportunity by 2024." The division generated $141 million in revenue in 2021, up from just $11 million the prior year, Uber said.
Wall Street analysts this week expressed their disappointment at Uber's overall profit projections. Advertising tends to be a high-margin business, but, as Insider's Tom Dotan reported Tuesday, Uber Ads will require further investment in a dedicated salesforce and technology if it is to succeed.
Uber has shown sponsored listings within its delivery apps like Uber Eats and Postmates for some time, but only began experimenting with placing ads in its core ride-hailing app last summer. Uber also signed a deal with adtech company Adomni to put physical ad displays on top of driver's vehicles last year.
In testing with brands including Marriott, Mars Wrigley, and American Express, Uber riders were "exposed to the ad content for approximately 2-minutes, which is significantly more than on any other platform," Grether said. That resulted in a "2 to 6X brand performance lift" versus competitors, according to analytics platform Upware, Uber's presentation slides said.
Grether said Uber's physical ad network launched across more than 3,000 cars in the US, resulting in "100 million daily impressions." Some drivers who installed the ad displays increased their earnings by around 20%, he added.
A big part of Uber Ads' growth will involve signing up new advertisers that aren't also merchants on its delivery apps, such as entertainment brands, finance firms, and travel companies.
Alongside in-app ads and car tops, another format Uber is exploring is "the tablet opportunity," which would see it offering additional displays inside cars themselves, Grether said. New ad formats are set to include sponsored search, sponsored branding, sponsored video, and other sponsored items, according to the presentation.
"With our large user base and first-party data, we can provide strong advertiser returns and deep insights for our advertisers, which will attract more of them," Grether said. "With more advertisers on our platform, we can grow our advertiser profits, which we'll use to reinvest in the future growth of our core businesses, accelerating the flywheel program of our advertising business."
