Inside Uber’s beefed-up ad offering as it plots international expansion

Despite making its advertising ambition clear last September, Cannes Lions last week was the first opportunity Grether had to aggressively pitch to brands and agencies the comprehensive offering across its Eats and Rider apps. Step one was to use the new ad inventory to target media execs traveling by Uber from Nice Airport to the advertising festival 30 minutes away. In the travel app, they were encouraged to visit Uber’s villa where it was hosting meetings and demos on the swathe of new options across both platforms.

What’s on offer?

On the delivery app UberEats there have been sponsored listings (targeted at restaurants looking to inspire consumers on what to eat at the point of ordering) for a while. Similarly, in its Grocery and Convenience section, consumer packaged goods (CPG) brands such as Unilever, P&G and Kraft Heinz have been tapping into the sponsored listings inventory to reach consumers at the point of purchase within stores. But now, in the final stage of the ordering process where the user tracks a delivery’s progress in real-time, it has launched a video ad format. It claims to have completion rates above 30% for the two-minute videos shown. “That’s one of our growth bets for the future,” says Grether.

However, it’s on the Rider app where he’s been making the biggest changes since arriving from Amazon just a few years ago. Harnessing the swathes of travel data it’s sitting on, the company is pitching brands an “ad takeover” experience during a journey. On opening the app, travelers will find a static advert from a brand and, as in the Eats experience, they’ll be hit with a video from that same advertiser as they track their ride.

“On average, it’s about two minutes that the consumer has the app open. So, it’s 100% share of voice in those two minutes, which is so much more than an advertiser sees on a social platform. And, therefore, the engagement rates are super high, north of 3%. So, it’s really powerful – especially based on the data that we have about the consumers and how we can combine Rider and Eats data to really make ads relevant.”

During a journey, a rider will also be met with screens in the car – again taken over by a single, targeted advertiser. Currently, these are static ads but soon video will be the default.

“An average ride is about 20 minutes, which means 20 minutes where a person is leaned back and really receptive to advertising. And that’s where a lot of clients, such as those in entertainment, fashion, travel and financial, are using the opportunity to engage our consumers. The idea here is really to go into more CTV types of advertising campaigns. It’s basically your TV placement.

“In the US at least, we spend about eight hours a week in the car – and in the future, you’ll either be driven by an Uber driver or it will be self-driving. As a consequence, the car will become your living room and the screen will become your next TV screen. And that’s a really powerful idea if you think about it.”

It has only launched this inventory in the US, alongside digital screens on top of cars in seven cities. “That’s our digital out-of-home play. It helps to drive traffic into retail stores. Obviously, the ad is different depending on whether it’s on Fifth Avenue in New York or Wall Street. It’s targeting the audiences in different regions and based on the stores in that region.”

While much of the new Uber ad inventory is only available to US advertisers, this year Grether is planning an international rollout of virtually every element. It’s in the process of building out the global salesforce to “really inject the demand and operationalize it” in key markets including Canada, Brazil, Mexico, the US, the UK, France, Australia, Taiwan and Japan.

“We are hiring now in each of the countries – a sales team and an account management team. We’re building it out country by country.”

Who’s buying it?

Grether boasts that almost every major advertising category is interested in spending on its platform, from CPG and fashion to entertainment, travel and even auto brands. “If we know that you are right now in a Toyota or a VW, then it’s almost kind of a test drive, right? So why not give you the option to click on a button and say you want to book a real test drive?“

And while entertainment companies such as Paramount, Disney or ABC struggle to get people to watch two-minute-long trailers for their movies or TV show, Uber is promising them it’s possible in one of its cabs.

In one of the clearest signals that Uber Advertising will hit its $1bn revenue target in 2024, Grether inked a landmark deal with US holding company Omnicom to give its agencies access to first-party data for planning and executing campaigns for clients.

“We’ve done a few tests. Again, the idea is that we have very strong first-party data that we can make available and that only Omnicom can use for campaign planning purposes. Its audience segments will then be pushed back into Uber and we can activate the campaign across both the Eats and Rider apps.”

Omnicom is the first holding company it has partnered with, much to the annoyance of others at Cannes Lions – especially WPP considering Grether was co-founder and global chief operating officer of its programmatic media platform Xaxis, serving there for over five years.

“Omnicom came to us. It did a great job of seeing the opportunity and grabbing it. But as you can imagine, I’ve had a few conversations with my former employer and some others on why Omnicom was first.”

It may be able to claim the first-mover advantage, but Omnicom won’t be the only holding company on Uber’s books. Grether stresses its rivals have since approached him and Omnicom is well aware it won’t be able to claim exclusive Uber data rights for long.

Does it work?

Uber purports to have 130 million active users globally and that they show a higher level of engagement with ads within the Uber ecosystem than on other platforms, such as social media.

“As you can imagine, from an Uber perspective, the user experience is the number one thing. I need to make sure that the rider experience is enriched with advertisements; that ads are a reason for people to spend more time in the car. And we’ve found that when we show ads in a car, more riders take an Uber. We’ve done A/B tests to find that out, which is really interesting.”

But proving these ads actually work for brands is a key challenge in the coming years. On Delivery, it’s “easy” says Grether. “We measure the transactional platform and, therefore, we can tie back to the advertisement and we can deliver ROI. Simple.”

Proving the ROI on its Rider apps is a little tricker. It’s pushing viewability rates, impressions and clicks, but in the immediate future, it plans to launch an attention-based metric with external partners.

Grether declines to go into detail on where it’s at on that journey. “The point is Mobility is really about awareness. And Eats is really about performance. So we’re bringing together awareness and transaction campaigns.

“But it’s also about audience insights. That’s an area advertisers are leaning into given what we have and what we know about our Uber users. We can provide rich insights back to the advertisers. When we talk about audience insights, we not only know what people buy on our platform online, we know what people do in the real world and I think that’s a key differentiator that a social media platform typically doesn’t know. We know when people are going to the movies, how often they’re going to the gym, when they’re going to the airport. If they’re going to the grocery store, we know how often they’re going to a grocery store. We know how often they go to a hairstylist. That’s a tremendous amount of buildable data.”

Checking ads to protect the experience

Uber has run into criticism for harnessing this incredibly personal data on its users to serve them an ad experience within a service they’re already paying for. The quid pro quo for people generally is that the service they’re using will be free or at least significantly cheaper if they’re subjected to adverts while using it.

For Uber, that’s a no-go. In fact, Grether once again reiterates that, in this case, advertising enhances the user experience of a ride. “Maybe we need to do a better job in communicating the value. Right now, I’m heavy with the fact that consumers come to me and share a great ad they saw. I remember when we ran a campaign with the US Open and we showed a fashion brand. So many people reached out to me afterward. It really showed me it’s relevant and cool. But maybe at some point – we need to go to the next level.”

That might only wash with users if the creative execution is something paramount to what they’d see anywhere else. To that end, Grether says it has a team of internal creatives working directly with brands and agencies to elevate campaigns to an Uber standard. “We quality check everything. And only if it raises the bar on the platform and if it’s positive to our experience… only then will we run it. The core business is mobility and delivery services. And advertising is only in support of that.”

At its annual earnings update later this year, we’ll find out exactly how big that support will be.