Uber, the global ride-hailing giant, is selling businesses a new type of advertising: again turning vehicles into mobile billboards, but with the technology to be more nimble and customizable than traditional outdoor ads. This innovative strategy would be a win-win, adding value to both advertisers and users, and increased user engagement on Uber’s platform.
How the Sponsorship Rides Program is Set Up
Its new ad business would allow companies to sponsor rides for users and give them a discount or cover the full fare in exchange for being able to run targeted ads during the trip. This enables brands to create ads targeted at specific demographics and locations, for increased relevancy and effectiveness.
Riders receive low cost or free transportation, and advertisers obtain a novel means of communicating with consumers in an intimate, captive environment.
“This is a program about deep relationships that amount to value for all involved brands, riders and Uber alike,” a spokesman for the company said in a statement.
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With competition heating up in the mobility sector, Uber is trying to create new revenue streams away from ride fees and deliveries. Advertising seems like an exciting opportunity, and combining it with ride sponsorship has a few benefits:
- Improved user engagement: Ride-time ads have a higher potential to grab attention compared to typical digital advertising.
- More rides: Sponsored riders spur more frequent use of Uber’s services by subsidizing the cost.
- Appealing to brands: Advertisers can target specific audiences and travel habits through enhanced data tools and insights on the platform.
What It Means for Riders and Brands
Sponsored rides actually offer riders something: cheaper transportation. This may be particularly beneficial to those who are budget conscious or who depend on rides for their daily routine.
Brands, meanwhile, have the opportunity to create deeper and more meaningful relationships with consumers through creative, contextually relevant advertising. Some campaigns may have interactive features, or even offer exclusive things that engage riders more than a standard ad experience.
Addressing Privacy and User Experience
Uber is sensitive to the issue of data usage and user privacy. The company pledged to be clear about how it uses data, and makes sure any advertising integration respects the choices and privacy of riders.
And if they’d rather not do sponsored rides, riders can simply choose instead to have an ad-free experience and remain in control of how they use the platform.
The Future of Ride-Based Advertising
Uber’s move is an indication of a larger trend: the merging of advertising with experiential consumer offerings to upend how brands engage consumers in everyday moments.
If effective, this model could change digital advertising by integrating brand messages into things that people use all the time, like services or features — making advertising more relevant and less annoying.
