Rideshare giant Uber is making significant waves in the advertising sector, with its ad network now boasting approximately 400,000 advertisers, including 55,000 new additions this quarter alone. The company’s CEO, Dara Khosrowshahi, proudly announced during an earnings call that the expected annual revenue, or “revenue run rate,” for the platform is more than $650 million.
According to Khosrowshahi, the “vast majority” of these advertisers are small and medium-sized businesses contributing to a “very, very healthy spend” that is highly profitable. With such growth, Uber sees its ad business potentially reaching a billion-dollar valuation by 2024.
The company’s recent success in advertising comes as part of broader financial gains, with Uber’s revenue growing 14% year over year to $9.2 billion, and the rideshare platform turning an operating profit for the first time.
Uber’s advertising business operates within a suite of ridesharing and delivery apps, such as Drizly and Uber Eats, as well as out-of-home inventory in cities including New York and Phoenix. Further, the company has begun running ads on tablets installed in drivers’ cars.
Investments are also being made in ad products to help enterprise and Consumer Packaged Goods (CPG) advertisers target their desired audiences. Partnerships have been announced with Omnicom Media Group and ad-tech company Criteo. Uber is now focusing on full-length video ads across its platform, aiming to unlock connected TV advertising budgets.
Uber’s dramatic expansion in the advertising sphere underscores the brand’s ability to innovate and diversify its business model. The strong growth in advertisers, coupled with a focus on targeted advertising solutions and technological advancements, points to a promising future for Uber in this domain. However, it also sets a high bar and creates expectations for continued growth and innovation. The pursuit of turning the ad network into a billion-dollar business will require not just maintaining the current momentum but also successfully navigating the highly competitive and ever-changing landscape of digital advertising. Uber’s foray into this field represents an exciting development and will likely serve as a case study for other brands seeking to leverage their platforms for advertising success.