In ExchangeWire’s latest MadTech Sketch, Ciarán O’Kane looks at why commerce media is having a moment, and what a successful commerce media business looks like.
Uber announced this week that it is now “profitable”. Yes, after 13 years of huge investment the ride hailing/food ordering app is finally in the black. It’s a big moment for the company.
Dara Khosrowshahi told analysts on the earnings call that Uber will remain profitable growing forward. That’s a pretty optimistic outlook. Why so bullish? The answer: advertising revenue. Uber has a run-rate of USD$600m (~£470m) in ad revenue.
Dara clearly sees this as the profit margin. Simply put: run the core business at break even, and let ads make the margin.
Uber is just one of a batch of utility apps and services (known to the industry as “commerce media”) leveraging first party data for outcome based advertising.
We have seen this type of model before: utility publishers have thrived.
But through a combination of shifting budgets, consumer behaviour and an imminent cookiepocolypse, we are seeing an explosion in this category.
In this week’s MadTech sketch, I outline the Uber commerce media model – and why it’s having a moment.
Where is the budget coming from? Could PPLAs (programmatic product listing ads) accelerate growth, enabling a raft of CPGs and DTC brands to market to audiences across the “recom media” ecosystem? This sketch attempts to answer these great questions.