The MadTech Sketch: How Commerce Media is Grabbing Ad Share

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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.

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