Uber Ads Achieves $1 Billion Annual Revenue

Uber announced its ad business has reached a $1 billion annual revenue run rate, just one year after launching.

Why it matters: The rapid growth of Uber Ads highlights the potential for advertising within the ride-hailing and food delivery industries, as well as Uber’s ability to diversify its revenue streams beyond its core services.

The details:

• Uber Ads offers various ad formats, including in-app ads, email ads, cartop displays, and in-car tablets.
• The company is exploring ways to provide advertisers with more contextual information about users’ trips, such as their destinations.
• Uber Ads sees growth potential in programmatic advertising, measurement, and playable ads that allow users to unlock promotions through advertiser games.
• Partnerships with platforms like The Trade Desk, Yahoo DSP, and Google’s Display & Video 360 have expanded the reach of Uber’s Journey Ads.

Uber reported a 16% year-on-year increase in revenue to $10.7 billion for the quarter ended June 30, beating Wall Street estimates.

What they’re saying:

• “We know they’re going to a Taylor Swift concert because we know their destination is Wembley Arena. That contextual element is really powerful because location-based marketing has often been a little bit of a guess,” said Paul Wright, Head of International at Uber Ads.
• “One of the unique things about our platform is the ability to do both effectively in a non-cluttered environment,” Wright added, referring to Uber Ads’ ability to offer both transactional and brand opportunities.

The big picture: Uber’s success in the advertising space demonstrates the growing importance of alternative revenue streams for tech companies and the potential for targeted advertising based on user behavior and location data.

What’s next: As Uber Ads continues to expand its offerings and partnerships, the company is well-positioned to capture a significant share of the digital advertising market, particularly in the mobile and location-based segments.

Full story

Uber announced on Tuesday that its ad business has reached a $1 billion annual revenue run rate. The company launched Uber Ads in 2022, offering various ad formats on its Uber and Uber Eats apps, as well as in emails, on cartops, and in-car tablets. Paul Wright, Head of International at Uber Ads, said in an interview that the company is looking into ways to help advertisers get more tactical about the context of a user’s trip.

“We know they’re going to a Taylor Swift concert because we know their destination is Wembley Arena. That contextual element is really powerful because location-based marketing has often been a little bit of a guess,” Wright explained. Uber Ads sees potential for further growth in areas like programmatic advertising, measurement, and playable ads.

The company is testing a format that lets users play advertiser games to unlock promotions. “A lot of retail media platforms are great at the transactional elements, but they don’t necessarily offer brand opportunities in the same way.

Uber Ads accelerate annual revenue

One of the unique things about our platform is the ability to do both effectively in a non-cluttered environment,” Wright added. The company is also looking to third-party partnerships to drive its growth. As of earlier this year, advertisers could buy Journey Ads in the Uber Rides app through platforms like The Trade Desk, Yahoo DSP, and Google’s Display & Video 360.

In June, Uber partnered with T-Mobile to roll out Uber’s in-car JourneyTV to more than 50,000 vehicles in the US this year. Uber reported a 16% increase in revenue year-on-year to $10.7 billion for the quarter ended June 30, beating Wall Street estimates. Its shares rose 6% in pre-market trading.

Last month, Tom Champion, a senior research analyst at investment bank Piper Sandler, expressed optimism about the prospects for Uber Ads due to its two-sided marketplace and its scale compared to other apps in the gig economy space. Piper Sandler raised its price target for Uber’s stock to $88 from $86. Uber stock was trading at $62 at the time of writing.